Apple stock falls after company gives outlook suggesting weak iPhone sales

Apple
reported
fiscal

first-quarter
earnings
Thursday
that
beat
estimates
for
revenue
and
earnings,
but
it
showed
a
13%
decline
in
sales
in
China,
one
of
its
most
important
markets. 

Apple
shares
fell
more
than
4%
in
extended
trading
after
management
provided
some
details
about
outlook
for
the
current
quarter
that
suggested
weakness
in
iPhone
sales.

Here’s
how
Apple
did
versus
consensus
expectations
from
LSEG,
formerly
known
as
Refinitiv,
for
the
quarter
ending
Dec.
30: 

• 
  Earnings
  per
  share:
  $2.18 vs.
  $2.10
  expected 
• 
  Revenue:
  $119.58
  billion
  vs.
  $117.91
  billion
  expected 

 Here’s
how
Apple’s
product
lines
did
versus
LSEG
expectations:
 

• 
  iPhone
  revenue:
  $69.70
  billion
  vs.
  $67.82
  billion
  expected 
• 
  Mac
  revenue:
  $7.78
  billion
  vs.
  $7.73
  billion
  expected 
• 
  iPad
  revenue: $7.02
  billion
  vs.
  $7.33
  billion
  expected 
• 
  Other
  Products
  revenue:
  $11.95
  billion
  vs.
  $11.56
  billion
  expected 
• 
  Services
  revenue:
  $23.12
  billion
  vs.
  $23.35
  billion
  expected 
• 
  Gross
  margin: 45.9%
  vs.
  45.3%
  expected 

Apple
did
not
provide
guidance
for
the
current
quarter
ending
in
March.

Apple
CFO
Luca
Maestri
said
that
Apple
expected
iPhone
sales
in
the
March
quarter
would
be
similar
to
last
year’s
$51.33
billion
in
revenue,
after
taking
out
$5
billion
in
sales
attributed
to
outperformance
a
year
ago
as
supply
recovered
from
Covid
shutdowns
and
caught
up
to
demand.

Maestri
said
total
company
revenue
would
be
similar
to
last
year’s
$94.84
billion
after
taking
out
the
$5
billion
in
iPhone
sales.
He
added
that
services
would
grow
the
same
as
in
the
December
quarter,
which
was
11%.

Apple
reported
2%
sales
growth
in
the
December
quarter,
breaking
a
streak
of
four
straight
quarters
with
annual
revenue
declines.
Apple’s
gross
margin
continues
to
rise,
nearly
breaking
46%
in
the
December
quarter.
Apple
reported
$33.92
billion
in
net
income
during
the
quarter,
up
13%
from
the
same
period
last
year. 

Apple
CEO
Tim
Cook
told
CNBC’s
Steve
Kovach
that
some
of
the
company’s
growth
rates
actually
represent
a
“huge
acceleration”
from
last
quarter,
because this
year’s
December
quarter
has
one
fewer
week
than
last
year’s
first
fiscal
quarter
due
to
the
way
Apple’s
corporate
calendar
works.
 

“It’s
important
to
keep
in
mind
that
last
year,
we
had
14
weeks
in
the
quarter.
This
year
we
had
13,”
Cook
said.
 

IPhone
sales
were
just
under
revised
Street
expectations
and
grew
nearly
6%
to
$69.70
billion,
a
positive
sign
for
the
iPhone
15
models
released
in
September.
This
is
Apple’s
first
full
quarter
with
iPhone
15
revenue.
 

Apple’s
profitable
services
business
rose
11%
during
the
quarter
to
$23.11
billion
in
revenue,
but
it
still
came
in
slightly
short
of
estimates.
Investors
closely
watch
the
growth
of
Apple’s
services
business,
which
includes
subscriptions
such
as
Apple
Music,
warranties,
search
licensing
revenue,
and
payments
from
Apple
Pay
and
Apple’s
advertisements.
 

Apple
said
it
had
2.2
billion
active
devices
in
use,
a
metric
that
many
analysts
say
informs
how
they
forecast
Apple’s
services
growth.
That’s
up
from
2
billion
active
devices
at
the
same
time
last
year.
 

Cook
attributed
services
growth
to
products
including
advertising,
cloud
services,
payments,
and
the
company’s
App
Store.
He
said
that
Apple
has
more
than
1
billion
paid
subscriptions,
which
includes
subscriptions
to
apps
through
the
App
Store.
 

Apple
showed
sales
growth
in
all
regions
except
for
Greater
China,
which
fell
nearly
13%
from
the
same
time
last
year,
potentially
stoking
fears
of
receding
demand
for
Apple
in
its
third-largest
market.
It
has
faced
increased
competition
from
local
firms
such
as
Huawei.
Greater
China
includes
the
mainland
in
addition
to
Hong
Kong
and
Taiwan.
 

Cook
told
CNBC’s
Kovach
that
iPhone
sales
in
the
region
was
what
“everyone
seemed
to
be
focused
on.” 

“If
you
look
at
the
13
and
then
you
do
a
double
click
to
look
at
Mainland
China
and
look
at
constant
currency,
the
dollar
is
very
strong
versus
the
RMB,”
Cook
said.
“And
so
that
-13
goes
to
a
mid-single
digit
number.
And
so
that’s
how
we
did
on
the
phone
last
quarter.
The
good
news
is
that
we’re
four
out
of
the
top
six
top-selling
smartphones
in
urban
China.” 

Mac
sales
grew
less
than
1%
during
the
quarter
to
$7.7
billion,
in
line
with
estimates.
It’s
a
significant
recovery
for
the
product
line,
which
fell
nearly
34%
on
an
annual
basis
in
the
September
quarter.
 

IPad
sales
continue
to
slump,
falling
25%
during
the
quarter
to
$7.02
billion,
slightly
short
of
Street
estimates.
Apple
didn’t
release
a
new
iPad
model
in
2023
for
the
first
time
in
the
product’s
history.
 

Cook
said
that
iPad
performance
“wasn’t
a
surprise
to
us.”
 

“The
iPad
faced
a
very
difficult
comp,
if
you
recall,
in
the
year-ago
quarter
where
we
launched
iPad
Pro
and
iPad
10th
generation,”
Cook
said.
 

The
company’s
wearables
business,
sometimes
called
“Other
Products,”
includes
AirPods
headphones
and
the
Apple
Watch.
It
also
had
a
rough
quarter,
declining
11%
on
a
year-over-year
basis
to
$11.95
billion
in
sales,
although
it
topped
Street
estimates.
The
newest
Apple
Watches
were
removed
from
Apple
stores
in
December
for
a
few
days
over
a
patent
dispute
with
medical
device
company
Masimo. 

Apple
said
it
spent
nearly
$27
billion
on
dividends
and
share
repurchases
during
the
quarter. 

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