Production issues in China seemed to impact Apple far more than expected in the holiday quarter, as the consumer-electronics giant delivered a miss for its iPhone category after the close of Thursday trading.
Apple’s iPhone revenue fell to $65.8 billion in the fiscal first quarter from $71.6 billion a year before, whereas analysts tracked by FactSet were looking for $67.8 billion.
The performance comes after Apple warned in November that its iPhone 14 Pro and Pro Max shipments would be impacted by pandemic-fueled production constraints at a major Foxconn
facility in China.
were down 4% in after-hours trading Thursday.
Overall revenue for the December quarter fell to $117.2 billion from $123.9 billion a year prior, while the FactSet consensus was for $121.4 billion.
Apple generated net income of $30.0 billion, or $1.88 a share, compared with $34.6 billion, or $2.10 a share, a year earlier. Analysts were modeling $1.94 in earnings per share.
After reporting a quarterly revenue record for Macs in the September quarter, Apple fell way short of those heights in the December quarter and missed expectations by a wide margin. Mac sales declined to $7.7 billion from $10.9 billion a year earlier, while analysts had been looking for $9.4 billion.
Within its iPad segment, Apple showed growth, as revenue increased to $9.4 billion from $7.3 billion a year earlier. The FactSet consensus was for $7.8 billion.
Revenue for wearables, home and accessories came in at $13.5 billion, down from $14.7 billion a year before, whereas analysts were modeling $15.3 billion. Services revenue rose to $20.8 billion from $19.5 billion and beat the FactSet consensus, which was for $20.4 billion.
One focus on the earnings call will be how Apple is managing expenses in a tougher economic climate. While Chief Executive Tim Cook said in November that Apple was being “very deliberate” with its hiring, other big technology companies, including Amazon.com Inc.
and Alphabet Inc.
have since moved to lay off workers.
Investors will also want to know how consumer spending is holding up in a weaker economic climate, and whether Apple executives expect to be able to make up for iPhone sales lost during the period when the company was seeing supply constraints.
Shares of Apple have fallen 14.2% over the past 12 months, though they’re up 16.1% to start 2023. The Dow Jones Industrial Average
is off 4.4% over a 12-month span but ahead 2.7% so far this year.