Apple has reported a steep decline in sales. iPhone sales are down 8 per cent, while MacBook sales have crashed. Shares in the Company slumped after the close of trading.
Sales of iPhones fell 8.2 per cent to US$65.8bn, versus forecasts for a 3.4 per cent fall to $69.2bn.
Sales of its Mac computer plunged 29 per cent to $7.74bn, and revenues from the wearables unit, which sells the Apple Watch and AirPods, dropped 8.3 per cent to $13.5bn.
The Company posted overall quarterly revenues of US$117.2 billion, down 5 per cent year over year, and quarterly earnings per diluted share of $1.88.
Apple finance chief Luca Maestri told the Financial Times that without disruptions iPhone sales would have grown. He declined to estimate what the shortfall was, saying, “We lost significant production.” Chief executive Tim Cook in a statement described the environment as “challenging”.
The Company had warned three months ago that foreign exchange headwinds could shave up to 10 percentage points off revenue, equal to a roughly $12bn hit. According to the results on Thursday, the actual impact was about 8 percentage points.
“Eight per cent is a lot of revenue that we lost to the strength of the dollar, but it’s better than it was three months ago because the dollar has weakened a bit,” he said. Inflation is still going up in the UK, and started to mitigate a bit in the United States, so that is affecting currencies as well.”
Maestri said Apple’s “active installed base” – the number of iPhone, iPad and other devices in use – has crossed 2bn, up from 1.8bn a year ago. “This is twice the number of active devices that we had just seven years ago,” he said.
“As we all continue to navigate a challenging environment, we are proud to have our best line-up 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,” said Cook.
“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.”
“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,” said Luca Maestri, Apple’s CFO. “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.”
Apple’s board of directors has declared a cash dividend of $0.23 per share of the Company’s common stock. The dividend is payable on February 16, 2023, to shareholders of record as of the close of business on February 13, 2023.
The Wall Street Journal claims that for the important holiday quarter, the company struggled to keep up with demand for its latest premium iPhone 14 Pro models as China’s zero-Covid policies caused upheaval at a smartphone factory in Zhengzhou. In November, Apple issued a rare warning about disruptions to output of the iPhone 14 Pro.
Apple has been able to get its supply chain back in order and increase its iPhone 14 production, and China has loosened its Covid-19 restrictions. Analysts now expect iPhone demand to be pushed to the current March quarter, but some have also expressed concern that Apple might face reduced demand for iPhones and other products.
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