Customers Waiting on New iPhones Crimp Apple’s Profits

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“People are waiting to see what’s going on with the new iPhone,” said Ben Schachter, an analyst at Macquarie Securities. “Apple needs to make sure the next phone has that ‘wow’ factor.”

That will be particularly important in China, the world’s largest smartphone market, where revenue fell 14 percent in the three months that ended April 1. The continuing poor results there dragged down brisk sales elsewhere, Apple executives said.

“We gained market share in almost every country that we track,” Luca Maestri, Apple’s chief financial officer, said in an interview.

Apple’s stock price over the last six months.

Timothy D. Cook, Apple’s chief executive, focused on several bright spots during a call with investors. Services grew 18 percent to $7 billion, and Mr. Cook said that customers were paying for 165 million active subscription services from Apple and third parties.

“Apple Watch sales nearly doubled year over year,” Mr. Cook said. “Our active installed base of iPhones grew by double digits.”

Apple is awaiting the outcome of tax policy discussions in Washington. President Trump has proposed a major cut in the corporate tax rate and has suggested he would favor a reduction in taxes for money that American corporations hold abroad.

The company had $257 billion in cash and marketable securities on its balance sheet as of April 1, and analysts estimated that about 90 percent of it was stashed overseas.

A tax cut would be “very, very beneficial,” Mr. Maestri said, but Mr. Trump’s plan remains vague and has not yet been introduced as legislation. “It’s very difficult for us to speculate at this point in time what might happen,” he said.

Apple’s stock, which closed at a high of $147.51 on Tuesday, fell more than 2 percent in after-hours trading once its results had been released.

Apple raised the amount of money it was willing to commit to stock buybacks by $50 billion, and Mr. Maestri said that it would continue to buy despite the record price. “We really believe there is a lot of value in our stock,” he said.

Apple, which is based in Cupertino, Calif., also raised its quarterly dividend by 10.5 percent to 63 cents a share.

Jan Dawson, chief analyst at Jackdaw Research, said investors, too, are awaiting new iPhones. “What’s baked in the share price is a massive upgrade cycle,” he said.

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