It could have been worse.

By Aaron Pressman
July 27, 2016

Apple reported on Tuesday evening that its sales dropped 15% to $42.4 billion in the second quarter (its fiscal third quarter) largely because iPhones sales shrunk by 15% to 40.4 million units. That marked both the second-ever and second consecutive decline in iPhone sales at Apple. Profits declined 27% to $7.8 billion.

But the miserable results still managed to beat Wall Street analysts expectations, and Apple stock jumped 8% on Wednesday. Overall, most analysts seemed to be reassured that the results from Apple aapl weren’t even worse.

Toni Sacconaghi at Bernstein Research headlined his analysis “a sigh of relief.” Apple successfully launched the new, cheaper iPhone SE during the quarter, demonstrating strong growth in revenue from services like iCloud storage and app sales, and it is being hurt less by the strong dollar than in some previous periods, Sacconaghi noted.

“We believe that the iPhone business is still healthy today, and that accordion-like replacement cycles between full refresh and S-cycles explains the majority of the (year-over-year) contraction we are seeing this year,” Sacconaghi wrote in a report on Wednesday. “Importantly, iPhone’s installed base continues to grow, and its upgrade rate should stabilize at some point.”

Sherri Scribner at Deutsche Bank was somewhat less excited by the results, seeing some negatives among the positives, especially the 33% decline in sales to China and continued shrinkage in the shipments of all major hardware categories.

“It was generally a good quarter for Apple, given very low expectations,” Scribner wrote in her report. “However, we continue to worry about slowing smartphone growth and elongating refresh cycles in mature markets. Given these long-term challenges, we continue to view future growth as more challenged, and see current valuations as fair.”

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Angelo Zino at S&P Global Market Intelligence pointed to the success of the iPad Pro line in helping boost the average selling price of Apple’s tablet computer. Even though the number of iPads sold declined, revenue from those sales increased thanks to the higher selling price, he noted.

“We are encouraged by iPad revenue growth of 7% (units down 9%), aided by iPad Pro contribution, marking the first year-over-year increase for the product line since the Dec-Q of 2013,” Zino wrote.

For more on Apple’s results, watch:

Walter Piecyk at BTIG Research remained worried about future iPhone sales, observing that all the major U.S. carriers have experienced a dramatic decline in phone upgrade rates among their subscribers.

“Visibility is still not great on whether the elongating product cycles will stop elongating,” Piecyk wrote. “AT&T, Verizon and Sprint all reported record low upgrade rates this quarter and are providing little help in predicting how their customers will behave this holiday season.”

William Power at R.W. Baird highlighted Apple CEO Tim Cook’s comments about possible additional products coming for the Apple TV. “You shouldn’t look at what’s there today and think we’ve done what we want to do,” Cook said on Tuesday’s call with analysts. “We built a foundation that we can do something bigger off of.”

Power noted that growth in services revenue, which could include a video product at some point, is a major opportunity. “Apple noted that it views the current Apple TV product as the foundation for a future broader push, which seemingly leaves the door open for a bigger opportunity there at some point,” he wrote.

Apple has continued to borrow more money in the bond market to fund some of its stock buybacks, a strategy that gets around the fact that 90% of its $231 billion of cash cannot be returned to the United States without a hefty tax bill coming due. That drew some concern from Gerry Granovsky, a bond analyst at Moody’s.

“Apple’s slowing growth will place greater importance on the capital return program to support the share price,” Granovsky said. “Credit metrics will be further stressed if the company continues to raise debt to support the program.”

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