Apple said on Thursday that revenue fell for the second consecutive quarter from a year ago, though its results still beat analysts’ forecasts as iPhone sales rebounded faster than expected.
Total revenues fell 2.5% year over year to $94.8 billion, driven by sharp declines in Mac and iPad computer sales, while net income fell 3.4% to $24.2 billion. dollars. Analysts had forecast $93 billion in revenue and $22.6 billion in net profit, according to Refinitiv.
“The macro environment is tougher than it used to be, and that has affected the PC and tablet industry,” chief financial officer Luca Maestri told the Financial Times.
Maestri blamed “significant foreign exchange headwinds,” saying they represented a 5.4 percentage point drop on revenue. At constant currency, you said, revenue would have grown 3%.
iPhone sales, which account for 54 percent of total revenue, rose 2 percent to $51.3 billion, topping estimates of $48.9 billion.
The findings suggest that some customers who were unable to purchase a new phone in the holiday quarter when Apple was battling supply chain disruptions in China related to Covid-19, may have postponed their purchase.
“We saw a significant acceleration in iPhone revenues from December to March,” Maestri said, noting that smartphone revenues were down 8% in the previous quarter. “Those we lost in December, we recovered some in March and we will recover the rest at a later date.”
Services, a division that includes App Store sales and recurring digital subscriptions, rose 5.5% to $20.1 billion, in line with forecasts but slower than 17% a year ago . The fast-growing, high-margin unit now has 975 million paying customers – 150 million more in the past 12 months – and accounts for 22% of all revenues.
Mac sales fell 31%, worse than the 25% decline analysts had expected due to broader PC market weakness. iPad sales were also down 13%, as expected, while the wearables division, which includes AirPods and Apple Watch, was down 1%.
Dipanjan Chatterjee, an analyst at Forrester, said these declines are “a harbinger of the climb most consumer brands will face in the coming months, as consumers grow increasingly skittish about overextension.”
“The pandemic spending euphoria is over,” he added.
Regionally, Apple’s results were supported by emerging markets. Sales in Asia excluding China and Japan rose 15.3% to $8.1 billion. Sales were down about 3% in China and 8% in the US.
CEO Tim Cook said in a press release, “We are pleased to report an all-time record in services and a March quarter record for iPhone despite the challenging macroeconomic environment, and our installed base of active devices hits an all-time high.”
Shares of the $2.6 trillion tech group are up about 32% year-to-date. The stock was up nearly 2% in after-hours trading following the results.
Apple has announced that its board of directors has authorized spending $90 billion on share buybacks over the next 12 months, as planned. Apple has repurchased nearly $600 billion of stock over the past decade, according to S&P Global Market Intelligence.
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