Apple Inc. stated yesterday that although iPhone sales were expected to increase, revenue for the first quarter would likely decrease by a similar amount to the 5% decline it reported for the Christmas quarter.
Apple's revenues and profits for the most recent quarter fell short of Wall Street projections due to fewer iPhone sales, which caused the stock to decline after hours.
However, the losses decreased because Chief Financial Officer Luca Maestri predicted an increase in iPhone sales throughout the quarter that concluded on December 31.
After announcing results, Amazon.com and Alphabet also experienced a 4% decline. All had benefited from normal trade.
Apple's sales decreased across the board in the quarter, falling 5% to US$117.2 billion (RM497.6 billion). Except for services and iPads, all product categories saw a decline in sales. Apple's earnings per share came in at US$1.88, below Wall Street's profit projections for the first time since 2016.
According to IBES statistics from Refinitiv, analysts had projected sales of US$121.1 billion and earnings of US$1.94 per share. According to Apple Chief Executive Tim Cook, the production hiccups that marred Apple's crucial quarter are finally over.
Apple experienced a wave of difficulties during its first fiscal quarter, which concluded on December 31, leading Wall Street to anticipate fewer sales. The manufacture of the iPhone 14 Pro and Pro Max, two high-end models that would typically help raise Apple's margins, was slowed down as a result of Covid lockdowns at a factory in Zhengzhou, China. This put strain on the supply chain.
Cook stated that manufacturing hiccups "lasted through most of December" but that "production is now back where we want it to be" in an interview with Reuters. With greater China sales decreasing 7% to US$23.9 billion, Cook said the lockdowns in China posed a twin difficulty where both supply and demand were restrained.
"We did see an increase in traffic to our stores as compared to November and an increase in demand as December came around," Cook told Reuters when things started to reopen in China.
Apple, which receives more than half of its sales from outside the Americas, was also harmed by the strong US dollar, but the impact was less than anticipated as the dollar fell off its highs of the previous year. Apple claimed yesterday that the real impact was only 8% despite having previously warned investors that such foreign exchange concerns would have a 10% negative impact on sales. Apple anticipates that foreign currency rates will have a 5% impact on its fiscal second quarter.
Cook told Reuters, "I would point out that 8% is still a very substantial headwind. "That is not something I want to undervalue. If we had expanded at a fixed rate of exchange,
Wall Street experts had predicted that iPhone sales would decline this year in addition to supply chain issues, as part of a bigger pattern in which the iPhone 14 family debuted last year sells more slowly following two consecutive years of robust sales of iPhone 12 and 13 models. According to Apple, sales of iPhones totaled US$65.8 billion, an 8% decline from the prior year and the first decline since 2020.
According to Refinitiv statistics, the company's services segment, which includes software and content companies like the App Store and Apple TV+, saw a 6% increase in revenue to US$20.8 billion, in line with analyst estimates.
Cook told Reuters that the number of active devices in the company's base has increased from 1.8 billion to 2 billion since last year. According to him, the company currently has 935 million paid subscribers, up from 900 million the previous quarter, and services sales hit records in many areas, including China.
According to Refinitiv data, sales of the company's Mac computers, which had soared during the wave of people working from home during the epidemic, fell 29% year over year to US$7.7 billion, falling short of estimates of US$9.6 billion. The advent of new MacBook Pro laptops with Apple's own CPUs in the prior year resulted in a spike in sales, which led Apple officials to issue a warning that Mac sales would likely decrease year over year.
According to Refinitiv data, iPad sales increased 30% to US$9.4 billion, exceeding expert projections of US$7.8 billion. These sales also benefited from the epidemic. According to Refinitiv statistics, the wearable and accessories sector—which includes the Apple Watch and AirPods—fell 8% to US$13.5 billion from analyst projections of US$15.2 billion.
Cook told Reuters that the launch of new models and the absence of supply limitations, which had hampered sales of the tablet a year earlier, were to blame for the iPad's outstanding performance.
Investors at Apple are waiting to see if the business enters new markets this year. Apple is reportedly planning to release a mixed-reality headset this year that might cost approximately US$3,000. The company is also reportedly working on a more cost-effective follow-up product.
Though its workforce never expanded as quickly as those of its competitors, Apple is one of the only big technology companies that has not announced significant layoffs. It claimed to have 164,000 employees as of late 2022, a little increase of less than 20% from its 2019 headcount. While some businesses, like Meta Platforms Inc., which is laying off almost 11,000 workers, nearly doubled its workforce between 2019 and 2022.
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