After the bell on Thursday, Apple (AAPL) released its fiscal Q3 earnings, reporting Apple iPhone sales that fell short of analysts projections and revenue that decreased 1.4% from the previous quarter. The company’s iPhone division generates about half of its total income.
In response to this news, Apple stock dropped as much as 2.5% on Thursday in after-hours trade.
The business anticipates a double-digit decline in revenue
The computer giant’s revenue has declined for several quarters as a result of slowing Mac and iPad sales. Apple CFO Luca Maestri stated during a conference call with analysts that the business anticipates a double-digit decline in revenue for these items from the prior year due to pent-up demand from the prior quarter following plant shutdowns.
Apple’s Services division was a bright spot, growing 8% faster than anticipated from the prior year’s quarter to an all-time high. Additionally, the business exceeded forecasts for both overall revenue and earnings per share.
The quarterly report was released just a few weeks before Apple unveiled its new portfolio of hardware, which included the Apple iPhone 15 and its upcoming lineup of smartwatches.
If the macroeconomic picture doesn’t worsen from what we are expecting today for the current quarter, we anticipate our September quarter’s year-over-year revenue performance to be similar to that of the June quarter, according to CFO Luca Maestri.
According to Maestri, the company anticipates faster revenue growth for the Apple iPhone and services, while double-digit revenue declines for the Mac and iPad are anticipated “due to difficult compares.”
Because of the fall in the [US] smartphone market over the past few quarters, according to Maestri, the company’s performance in the Americas saw a little acceleration.
Reiterated Apple’s achievements in emerging regions
Cook reiterated Apple’s achievements in emerging regions during a call with analysts. According to Cook, revenue increased significantly across a number of nations, including Indonesia and India.
Cook observed a speeding up in China but differing customer behavior in the United States. The US smartphone market, he noted, is currently difficult.
Apple bragged about having 2 billion active devices installed.
In a statement, Cook added that the company was “happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of Apple iPhone.”
Apple’s earnings, which were released alongside Amazon’s results on Thursday, complete the quarterly reports from the top tech firms, which also included Meta’s (META) and Alphabet’s (GOOG, GOOGL) results that beat expectations and Microsoft’s sales shortfall from last week.
This year, the tech industry has experienced a boom as a result of rising cloud services, resilient online advertising, and cutting-edge AI technologies. The tech-heavy Nasdaq Composite (IXIC), which ended July by posting gains for five months in a row, is up about 40% of the year.