Shares of the iPhone maker Apple Inc. rose more than 7% in extended trading today after it reported earnings and revenue for its fiscal second quarter that topped expectations and revealed it’s expanding its stock repurchase program.

The company said its board of directors has authorized $110 billion in share repurchases, up 22% from last year’s $90 billion authorization and the largest in its history. That helped make up for declining revenue across its main business lines, with iPhone sales plummeting 10% from a year earlier.

Apple reported that its second-quarter earnings before certain costs such as stock compensation came to $1.53 per share, coming in ahead of Wall Street’s target of $1.50 per share. Revenue fell 4% from a year earlier, to $90.75 billion, edging past the analyst target of $90 billion. All told, the company’s net profit for the quarter came to $23.63 billion, down slightly from the $24.16 billion profit it recorded in the same period a year earlier.

Apple Chief Executive Tim Cook (pictured) told analysts that the company’s revenue growth was hurt by a difficult comparison to the year-ago period, when it realized $5 billion in delayed iPhone 14 sales relating to COVID-19 supply chain issues. “If you remove that $5 billion from last year’s results, we would have grown this quarter on a year-over-year basis,” he said. “And so that’s how we look at it internally from how the company is performing.”

Once more, the company declined to provide any formal guidance for the upcoming quarter, but Cook told CNBC in an interview that it’s expecting sales to grow in the “low single-digits.” Apple has avoided providing formal guidance ever since the COVID-19 pandemic began.

Apple’s finance chief Luca Maestri said on the earnings call that the current quarter will likely see a double-digit year-over-year increase in iPad sales, while services revenue is also expected to grow.

iPhone sales fell by almost 10% from the year-ago period to $45.96 billion, which indicates weak demand for the company’s current generation of smartphones, even when taking into account the difficult comparison Cook mentioned. Without last year’s increased sales, iPhone revenue would have remained more or less flat with the same period last year.

Apple said sales of its Mac personal computers rose 4% from a year earlier, to $7.45 billion, but still below its record performance set in 2022. According to Cook, Mac sales were driven by a new range of MacBook Air models that launched in March, featuring a more advanced M3 chipset.

Apple’s Other Products category, which includes sales of Apple Watches and AirPods headphones, saw revenue fall 10% from a year earlier to $7.9 billion. The unit saw its first new product category release in years with the launch of the new Apple Vision Pro virtual reality headset, but the company has previously said the $3,500 product is only expected to sell in low quantities compared to its other product lines.

Cook said the company is only just “scratching the surface” of the possibilities in VR, but “couldn’t be more excited” about the opportunity that exists.

Sales of iPads were down 17%, to just $5.6 billion, impacted by the fact that the company has not released a new version of its iconic tablet since 2022. However, it’s widely expected to announce a new series of iPad models this month, and will be hopeful that the launch will help to revive that part of its business in the coming quarters.

Cook told analysts that the company has “big plans” for its iPad product event, which is set to take place on May 7, and even more to announce at its annual Worldwide Developers Conference next month.

As usual, the Services business was a bright spot for the company, with sales rising 14.2% to $23.9 billion. The segment includes revenue from Apple’s subscription services, warranties, licensing deals with search engines and payments services. The company said it now counts more than 1 billion paid subscriptions, although this number includes those who subscribe to third-party apps via the Apple App Store.

The company took a hit in Greater China, its third-biggest market in terms of revenue, with sales falling 8%, to just $16.37 billion, during the quarter, though that number beat the Street’s forecast of $15.25 billion in sales. The stronger-than-expected performance there seems to have helped to ease investor’s concerns that the company may be losing market share to rivals such as Huawei Technologies Co. Ltd.

Holger Mueller of Constellation Research Inc. said investors will be concerned that, for all of the company’s efforts to diversify its business away from its reliance on smartphones, its fortunes remain tied to that of its iconic iPhone product.

“The latest results show that a drop of $5.5 billion in iPhone revenue cannot be made up by increases in other areas, such as Mac sales and services,” the analyst said. “The lack of innovation that hits the top line is also clear, with the launch of the much-vaunted Apple Vision Pro failing to improve its ‘Other Products’ category, where sales were down by more than $800 million.”

There were some bright spots though, the analyst said. He pointed to revenue growth in Europe and Apple’s progress in terms of business efficiency, trimming its sales budget by more than $4 billion during the quarter to help maintain its profitability, which was only slightly down from a year earlier.

“The new stock repurchase program will help to make the earnings-per-share key performance indicator more favorable, but the key takeaway is that Tim Cook has not yet found a way to compensate for a drop in iPhone sales,” Mueller added.

Apple’s latest report comes at a time when it faces a host of challenges across its business, with smartphone rivals such as Samsung Electronics Co. Ltd. adding artificial intelligence capabilities to its most advanced handsets that compete with the iPhone. In addition, Apple faces pressure on the regulatory front, with the European Union recently announcing it’s investigating the company’s business practices under its new Digital Markets Act, which has introduced strict rules regarding competition, privacy and app payment guidelines. Meanwhile in the U.S., the Department of Justice has accused the company of monopolizing the smartphone market and driving up prices.

Those pressures have weighed on Apple’s stock, and it has underperformed in comparison to other big technology companies this year, down 10% in the year to date.

Part of the concern stems from Apple’s relative silence regarding its product plans for generative artificial intelligence. Apple’s rivals, such as Microsoft Corp. and Google LLC., are placing enormous, multibillion-dollar bets on generative AI, and the company has been forced to respond in kind, with Cook saying it has spent more than $100 billion on AI research and development over the last five years.

“We continue to feel very bullish about our opportunity in generative AI and we’re making significant investments,” he told analysts on the call. “We’re looking forward to sharing some very exciting things with our customers at events later this year.”

A report from Bloomberg in March said Apple is having discussions with Google over the possibility of integrating that company’s Gemini models with some of its products. According to that report, Apple’s own generative AI tools are still far behind those of its competitors.

As a result, the company reportedly intends to use its own internal AI models in the upcoming iOS 18 iPhone operating system for onboard AI capabilities, while looking to Google’s models to perform the “heavy lifting” for other features. For example, Google Gemini would help power phone capabilities for generating images and writing essays based on user prompts.

As the company races to infuse AI into its products, its massive new stock repurchase program appears to have appeased investors who may have been worried about its flagging stock price. “It’s certainly a great time to resort to this strategy as, on the one hand, the stock remains relatively fairly priced, and, on the other hand, it needs to garner solid support for a structural shift that may very well take several quarters to play out,” said Investing.com analyst Thomas Monteiro.

In addition to the stock repurchase program, Apple said it will increase its quarterly dividend paid out to investors to 25 cents per share, up from the previous amount of 24 cents.

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