Earnings Results: Apple earnings show steepest sales decline in more than 6 years

by | Feb 2, 2023 | Stock Market

Apple Inc. posted its largest revenue decline in more than six years amid underwhelming sales of iPhones, Macs and wearables, but its shares pared back most of their initial losses in after-hours trading Thursday after the company blamed its smartphone declines on supply issues. Apple’s
iPhone revenue fell to $65.8 billion in the fiscal first quarter from $71.6 billion a year before, whereas analysts tracked by FactSet were looking for $67.8 billion. The performance comes after Apple warned in November that its iPhone 14 Pro and Pro Max shipments would be impacted by pandemic-fueled production constraints at a major Foxconn
facility in China.

Chief Executive Tim Cook said on Apple’s earnings call that he believes the company would have shown iPhone sales growth in the quarter had it not been for the supply constraints. At the same time, he noted that it’s “very hard” to estimate the company’s ability to recapture lost sales, “because you have to know exactly what would’ve happened.” Apple shares ended the extended session Thursday down 3.2%, after having been down as much as 5.6% in after-hours trading. After reporting a quarterly revenue record for Macs in the September quarter, Apple fell way short of those heights in the December quarter with its Thursday afternoon report, and the company missed expectations by a wide margin. Mac sales declined to $7.7 billion from $10.9 billion a year earlier, while analysts had been looking for $9.4 billion. Those big misses helped drive total revenue lower on the year and fueled a miss on the top line, despite a sizable beat in the iPad category. Overall revenue declined to $117.2 billion from $123.9 billion a year ago, while analysts were looking for $121.4 billion. Dating back to its report for the December 2017 quarter, Apple has only missed revenue expectations twice, according to FactSet, including one time when the company issued a formal warning ahead of its official results. The smartphone giant’s sales decline of 5.48% was its steepest year-over-year fall …

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