Apple beats earnings expectations despite 10% sales, 4% revenue drop

Apple CEO Tim cook with an iPhone. Apple’s revenue from the sale of iPhones stood at $45.96 billion, slightly below the expected $46 billion. Image Credit: AFP

Apple announced a slight decline in quarterly sales, dropping 4 per cent compared to the same period last year. However, the company managed to surpass expectations for both revenue and per-share earnings, demonstrating resilience amidst market fluctuations.

As a major player in the tech industry, Apple’s performance is closely watched, given its significant influence as a consumer of various components including displays and chips.

The company also announced a record-breaking $110 billion stock buyback, which further underscores its financial strength and commitment to returning value to shareholders.

Here’s a breakdown of the key numbers from Apple’s latest earnings report:

• Revenue: $90.8 billion, down 4 per cent from the previous year but exceeding expectations of $90 billion.
• Per-share earnings: $1.53, surpassing estimates of around $1.50.
• iPhone revenue: $45.96 billion, slightly below the expected $46 billion
• iPad revenue: $5.56 billion, falling short of estimates.
• Mac revenue: $7.45 billion, outperforming expectations at $6.8 billion.
• Services revenue: $23.87 billion, showing a 14 per cent increase from the prior year.
• Wearables, home, and accessories revenue: $7.91 billion, falling short of the estimated $8.08 billion.

Apple’s sales declined in every region except Europe

Going forward, Apple is gearing up for significant events that are expected to shape its trajectory for the future. A media event scheduled for next Monday is anticipated to unveil new iPad models, while the annual developer conference, WWDC, starting June 10 will likely provide further insights into the company’s AI strategy.

During a conference call with analysts, CFO Luca Maestri projected low single-digit revenue growth for the upcoming quarter, despite potential challenges from foreign exchange rates. Maestri expressed confidence in double-digit growth for both the iPad and services business segments.

CEO Tim Cook attributed the sales dip in the past quarter to tough comparisons with the prior year, which saw heightened demand following COVID-19-related disruptions. Cook highlighted the anticipated AI-related announcements in the coming weeks, emphasizing Apple’s unique advantages in this domain.

Responding to inquiries about the impact of European legislation requiring Apple to allow third-party app stores, Cook stated that it’s too early to assess the full ramifications. However, he affirmed Apple’s commitment to compliance while prioritizing user privacy and security.

As Apple navigates through evolving market dynamics and regulatory landscapes, its focus on innovation, financial strength, and customer-centric approach remain key pillars driving its continued success.