Giant tech company Apple has witnessed a decline in the overall sales for the holiday quarter, which is about 5% lower than last year’s, the first year-over-year sales decline since 2019.
The company posted a quarterly revenue of $117.2 falling short of estimated $121.10 billion, down from 5.4% year-over-year. The revenue of the iPhone was at $65.78 billion vs $68.29 billion estimated, down 8.17% year-over-year.
Speaking on the company’s poor performance, Apple’s CEO Tim Cook disclosed that three factors impacted the results; A strong dollar, production issues in China affecting the iPhone 14 pro and iPhone 14 pro max, and the overall macroeconomic environment.
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He said,
“As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do.
“During the December quarter, we achieved a major milestone and are excited to report that we now have more than 2 billion active devices as part of our growing installed base.”
Also commenting is the company’s CFO Luca Maestri who said,
“We set an all-time revenue record of $20.8 billion in our Services business, and in spite of a difficult macroeconomic environment and significant supply constraints, we grew total company revenue on a constant currency basis.
“We generated $34 billion in operating cash flow and returned over $25 billion to shareholders during the quarter while continuing to invest in our long-term growth plans.”
The company also recorded its iPad revenue at $9.40 billion vs. $7.76 billion estimated, up 29.66% year-over-year. Other products revenue was at $13.48 billion vs. $15.23 billion estimated, down 8.3% year-over-year.
It posted services revenue at $20.77 billion vs. $20.67 billion estimated, up 6.4% year-over-year and Gross margin at 42.96% vs. 42.95% estimated.
The quarter result was a stunning miss by Apple, and its first earnings miss versus consensus expectations in almost seven years. In fact, it was only Apple’s second revenue miss since August 2017, with sales coming in more than 3% below consensus expectations.
One major impact that affected the sales of its iPhone 14 and iPhone 14 pro max was the shut down of one its biggest factory (Foxconn) in China due to restrictions.
The shut down of the company reduced the sales of iPhones as there were only few to sell to customers, affecting the company’s revenue after production slumped as much as 30%.
Meanwhile, Apple will provide live streaming of its Q1 2023 financial results conference call beginning at 2:00 p.m. PT on February 2, 2023, but it did not provide guidance for the current quarter ending in March.
Apple has confirmed analysts’ fears, reporting its first year-over-year revenue drop since early 2019 and its biggest quarterly decline since 2016. The tech giant notched revenues of US$117.2 billion for the quarter ending Dec. 31, down 5% from a year earlier and missing Wall Street’s expectations by roughly $4 billion. That drop was partly a result of manufacturing problems in China, where COVID-related shutdowns hampered production of new iPhone models. But CEO Tim Cook said a strong dollar and the “challenging macroeconomic environment” also hurt revenue.
Revenue from iPhone slumped 8% compared with a year earlier. One bright spot was services — a segment that includes Apple Music and Apple Pay — which was up 6.4% year-on-year. Apple won’t replace Evans Hankey, vice president of industrial design, when she steps down this year, Bloomberg reports, citing anonymous sources. Hankey succeeded Jony Ive, the design chief behind some of Apple’s most iconic products.