On February 2nd, following the closing bell, Apple (APPL) reported its Q1 earnings, disappointing investors by missing analyst forecasts on the top and bottom lines, and falling short on iPhone sales, which fell over 8% year over year.
The company reported revenues of $117.1 billion, compared to a Bloomberg estimate of $121.1 billion. Adjusted earnings per share came in at $1.88 compared to a $1.94 Bloomberg estimate.
iPhone revenues were $65.7 billion, versus a $68.3 billion Bloomberg estimate. Mac revenue was $7.7 billion compared to a $9.72 billion estimate. iPad revenue was $9.4 billion compared to a $7.7 billion estimate. Wearables came in at $13.4 billion, compared to $15.3 billion estimated. Services was $20.7 billion compared to $20.4 billion estimated.
Shared immediately fell 3% off the report.
Apple CEO Tim Cook said in a statement, “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.”
November and December saw Apple buffeted with considerable headwinds, as the Foxconn manufacturing facility in Zhengzhou, China was forced to close due to violent protests by workers upset with Covid lockdown rules. The plant and its 20,000 workers are responsible for most of the production of Apple’s iPhone Pro and iPhone Pro Max handsets.
Starting at $999 and $1,099 respectively, the iPhone Pro and Pro Max are two of the company’s most important products for sale. The higher price of the two units boosts the average iPhone sales price which in turn drives the tech-giant’s revenues higher.
IDC”s Worldwide Quarterly Mobile Phone Tracker showed that in Q4 2022, shipments of the iPhone fell to 72.3 million units, from 85 million units just one year prior, marking a drop of 14.9%.
Although iPhone sales were down, Cook announced that Apple’s installed base now consists of two billion active devices. Mac and Wearables sales were also down year over year, however Apple had warned of those declines in its prior earnings report.
Even as the company has seen sales slow however, it has managed to avoid the massive layoffs other tech giants have employed, such as at Microsoft, Google, and Amazon.
