The past quarter has not been kind to Apple. Today the company announced its first revenue drop since 2019, with total revenue of $117.2 billion, a 5% year-over-year drop. Going into today’s earnings call, the consensus of Wall Street analysts was that Apple would log $121.19 billion of revenue or $1.94/share.

Tim Cook, Apple’s CEO, had this to say about the company’s earnings:

As we all continue to navigate a challenging environment, we are proud to have our best lineup 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. 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.

The year-over-year decline was driven by multiple factors, including:

• Shortages of iPhone 14 Pro and Pro Max caused by COVID lockdowns in China
• Soft consumer demand resulting from worldwide inflationary pressure
• Adverse effects caused by foreign currency exchange rates

Although Apple did not forecast results for Q1 2023 during its last earnings call, the company warned in November that production disruptions would impact shipments, so the declines today should not be a shock.

Despite Apple’s unusually poor showing today, it’s also important to put it in perspective. The entire technology sector has seen significant declines, with Microsoft, Meta, Google, and Amazon all laying off thousands of workers. To date, Apple has avoided widespread layoffs and there were bright points in its earnings, including the continued growth of its services, which increased to a record $20.8 billion.

With the entire tech industry experiencing substantial financial pressures, the question going forward is how quickly can Apple bounce back. Will the company be able to meet iPhone demand, and how will its rumored bet on a mixed-reality headset play out? With turmoil in the markets at large and a major new product in the wings, Apple’s 2023 should be one of the more interesting years in a long time, both for its investors and fans of its products.

Foreign exchange headwinds dampened Apple results. Source: Apple.

Today, Apple announced its fourth quarter 2022 earnings, exceeding Wall Street expectations and setting a record for Q4 results. During the quarter, Apple recorded $90.1 billion in revenue, an 8% year-over-year increase. Annual earnings per diluted share were $6.11, which is an increase of 9% year over year. In after-hours trading, Apple’s stock was trading down.

Apple’s quarterly revenue.

According to Apple’s CFO Luca Maestri:

Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop. We continued to invest in our long-term growth plans, generated over $24 billion in operating cash flow, and returned over $29 billion to our shareholders during the quarter. The strength of our ecosystem, unmatched customer loyalty, and record sales spurred our active installed base of devices to a new all-time high. This quarter capped another record-breaking year for Apple, with revenue growing over $28 billion and operating cash flow up $18 billion versus last year.

Services were down for the quarter.

Looking at the results, Services revenue declined slightly, and iPhone sales were less than analysts expected, both of which contributed to the decline in Apple’s stock price after hours. iPad sales were down too. Although Apple just recently refreshed the iPad lineup, none of those sales were part of today’s results.

Mac had a good quarter, while iPad sales were down a bit, changing the overall mix of the company’s revenue sources.

Foreign currency exchange rates had a significant impact on Apple’s latest results too. Tim Cook, who was interviewed by CNBC, told Steve Kovach:

The foreign exchange headwinds were over 600 basis points for the quarter. So it was significant. We would have grown in double digits without the foreign exchange headwinds.

To help control ongoing costs, Cook also revealed to CNBC that it has slowed hiring.

Despite some areas of softness, the results reported by Apple were positive overall, especially compared to other recent earnings misses in the tech world. Yesterday, Meta announced a significant earnings miss that led to a nearly 25% drop in its stock price today. Then today, Amazon came up short compared to Wall Street expectations leading to a 16% dip in its stock price.

Additional details regarding Apple’s fourth-quarter performance, including its consolidated financial statement are available on the company’s website. If you missed the earnings call, you can replay it on Apple’s Investors site or read the transcript prepared by Jason Snell at Six Colors, where you’ll also find additional charts.

Yesterday, Apple announced its third quarter 2022 earnings, narrowly beating analysts’ consensus expectations. The company didn’t provide earnings guidance going into yesterday’s call and hasn’t since the start of the global pandemic. Coupled with ongoing supply chain disruption caused by COVID-19, inflationary pressure in the US and other countries, and the threat of a recession in many of its key markets, analysts’ revenue predictions varied widely, averaging just under $83 billion. So, when the company’s revenue came in at $83 billion, and CEO Tim Cook said he expects growth to accelerate ‘despite pockets of softness,’ Wall Street responded positively, lifting the stock’s price in after-hours trading.

According to Apple’s CFO Luca Maestri:

Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category. During the quarter, we generated nearly $23 billion in operating cash flow, returned over $28 billion to our shareholders, and continued to invest in our long-term growth plans.

Despite the modest and unexpected growth from the same quarter in 2021, product sales slowed in some areas, with the Mac, iPad, and wearables all down year-over-year. That was made up by a strong increase in Apple’s services and a smaller increase in iPhone sales, but given delivery timelines for Macs and iPads in particular, supply chain issues appear to have taken a bite out of Apple’s earnings in those categories.

Still, the overall outlook of continued growth portrayed by Cook as the company prepares its fall iPhone lineup and for the release of other rumored products seems to have buoyed the stock with investors who undoubtedly appreciated the company’s optimistic message among the drumbeat of recent negative financial news.

Additional details regarding Apple’s third-quarter performance, including its consolidated financial statement are available on the company’s website. If you missed the earnings call, you can replay it on Apple’s Investors site or read the transcript prepared by Jason Snell at Six Colors, where you’ll also find additional charts.

Apple has just published its financial results for Q2 2021. The company posted revenue of $89.58 billion. Apple CEO Tim Cook said:

“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us,” said Tim Cook, Apple’s CEO. “Apple is in a period of sweeping innovation across our product lineup, and we’re keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world. That certainly begins with products like the all-new iMac and iPad Pro, but it extends to efforts like the 8 gigawatts of new clean energy we’ll help bring onto the grid and our $430 billion investment in the United States over the next 5 years.”

Apple Beats Expectations

As reported by CNBC, Apple beat Wall Street expectations:

Apple reported a blowout quarter on Wednesday, announcing companywide sales up 54% higher than last year, and significantly stronger profits than Wall Street expected.

Apple stock rose over 4% in extended trading.

Graphical Visualization

After the break, we’ve compiled a graphical visualization of Apple’s Q2 2021 financial results.

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