Apple predicts another drop in revenue, announces iPhone production problems are over |
February 2 (Reuters) – Thursday Apple Inc ( AAPL.O ) forecast a second straight quarter of revenue declines, but iPhone sales are expected to improve as production normalizes in China following COVID-related shutdowns.
While he struck an optimistic tone on sales of services and iPhones, CEO Tim Cook said the uncertain economy would hurt categories such as gaming and digital advertising.
In general, Apple leaders have tried to reassure investors that the world’s largest listed company remains on a steady – if somewhat slow – rise despite the firm facing up-and-down sales cycles for its flagship device and supply chain shocks. And right after the company’s worst financial results in years, at least some investors gave Cook the benefit of the doubt and imposed only a modest share price cut.
For the quarter just ended Apple’s profit missed Wall Street expectations for the first time since 2016, as iPhone sales fell 2020decreased for the first time since .
Shares fell about 2% after Chief Financial Officer Luca Maestri said iPhone sales would improve compared to the quarter ended Dec. 31. That didn’t completely erase the 3.7% gain during regular trading.
Amazon.com ( AMZN.O ) and Alphabet ( GOOGL.O ) also fell about 4% after the results. They had also gained during regular trading.
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Reuters GraphicsSALES, NO PROFIT EXPECTATIONS
Apple sales fell 5% in the quarter to 117.2 billion dollar and decreased all over the world. Sales were down in every product category, except for gains in services and iPads. Earnings per share 1.88 dollars has been
According to Refinitiv’s IBES data, analysts 121.1 billion dollars sales and 1.94 per share dollars they expected profit. In an interview, Cook told Reuters that the production disruptions that plagued Apple’s key quarter are now over.
“Production is now back to where we want it to be,” he said.
During its fiscal first quarter, which ended Dec. 31, Apple faced a wave of challenges that led Wall Street to expect lower sales. Among them were supply chain pressures when a COVID shutdown at a manufacturing facility in Zhengzhou, China slowed production of the iPhone 14 Pro and Pro Max, both premium-priced models that would traditionally help boost Apple’s margins.
Cook said the lockdowns in China created a dual problem with both demand and supply constrained, with more Chinese sales down 7% to 23.9 billion said that it fell to the dollar.
But product snaps are now lagging behind Apple. “They still feel demand will be soft, but they’ve adjusted production, which means they can meet demand if it unexpectedly picks up,” said Ben Bajarin of analyst firm Creative Strategies.
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Strong USA The dollar also hurt Apple, which derives more than half of its sales from outside the Americas, but the impact was less than expected as the dollar lost from last year’s highs. Apple warned investors that such currency exchange sales 10% will decrease, but said on Thursday that the actual effect was 8%. Apple expects a 5% impact on exchange rates in the second fiscal quarter.
“I would note that 8% is still very strong wind,” Cook told Reuters. “I wouldn’t want to underestimate it. We would grow on a stable currency basis.”
In addition to supply chain issues for the iPhone, Wall Street analysts expected iPhone sales to decline this year as part of a broader pattern of slower sales of the iPhone 14 family released last year after strong sales of the iPhone 12 and iPhone 12. 13 models. Apple said iPhone sales totaled $65.8 billion, down 8% from a year earlier and 2020decreased for the first time since
Reuters GraphicsONLY TWO GROWTH SEGMENTS
Only two segments grew. Revenue from the company’s services segment, which includes content businesses such as Apple TV+ and software businesses such as the App Store, rose 6% 20reached 8 billion dollars. iPad sales rose 30% to $9.4 billion, compared to analysts’ expectations of $7.8 billion, according to Refinitiv.
“Report it was not good. Management wasn’t great either. But it doesn’t matter. There’s just a relentless ‘buy the dip’ mindset in this market,” said Dennis Dick, trader at Triple D Trading. He has no position in Apple shares.
Cook told Reuters that the company now has a base of 2 billion active devices, up from 1.8 billion a year ago. The company now has 935 million paid subscriptions, up from 900 million in the previous quarter, and service sales have hit records in several markets, including China, he said.
The company’s Mac sales fell 29% year-on-year to $7.7 billion, soaring during a wave of work-from-home operations during the pandemic. The wearables and accessories segment, which includes Apple Watch and AirPods, fell 8% to $13.5 billion.
Reporting by Stephen Nellis in San Francisco; Added by Akash Sriram in Bengaluru report; Edited by Peter Henderson and Lisa Shumaker
Our standards: Thomson Reuters Trust Principles.
2023-02-03 06:30:26
Source – reuters
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