Shares Up 3% Despite Q1 Miss, iPhone Sales Drop

Apple Inc. (NASDAQ:AAPL) shares rose more than 3% intra-day on Friday despite the company reporting a Q1 miss driven by weaker iPhone sales.

Q1 EPS was $1.88, worse than the Street estimate of $1.94. Revenue dropped 5% to $117.2 billion, missing the Street estimate of $121.88 billion. This was the biggest quarterly revenue decline since 2016. iPhone sales fell 8% to $65.78 billion.

Q2 outlook is for revenue to be down 5% year-over-year, worse than Street's estimate at flat year-over-year. The company’s expectation that iPhone year-over-year revenue growth will accelerate (including recapturing some revenue loss in Q1) is particularly encouraging given one less week in Q2 than in Q1 and in a tough macro environment.

For the Services business, active device installed base, paid subscriptions, transactional and paid accounts are trending positively and are good leading indicators for the growth of the business.