Apple Inc. continued its streak of revenue declines into a fourth consecutive quarter, beating overall sales expectations but coming up short in China.
The company had seen revenue fall on a year-over-year basis during each of the previous three quarters, and it posted $89.5 billion for the fiscal fourth quarter Thursday, down from $90.1 billion a year before. Analysts were modeling $89.3 billion.
Will Apple
AAPL,
be able to generate revenue growth in the holiday quarter? Management left that up in the air, with Chief Financial Officer Luca Maestri saying that the company expects a “similar” revenue total in the December quarter relative to a year ago.
That guidance didn’t seem to match Wall Street’s hopes. Consensus expectations were for $123.1 billion in December-quarter revenue, whereas the company posted $117.2 billion on the top line in that same period a year before.
Net income for the September quarter was $23.0 billion, or $1.46 a share, compared with $20.7 billion, or $1.29 a share, a year before. Analysts were looking for $1.39 a share in earnings.
Apple shares were off 3% in late trading following the earnings call.
While the company expects iPhone revenue to grow on a year-over-year basis, iPad and wearables revenue could “decelerate significantly from the September quarter due to a different timing of product launches,” according to Maestri.
He noted that last year’s December quarter benefited from an extra week, while this year’s could see a 1-percentage-point negative impact from foreign exchange.
For the September quarter, Apple
AAPL,
reported iPhone revenue of $43.8 billion, up from $42.6 billion a year before, matching the FactSet consensus. The September quarter included just over a week’s worth of sales of the new iPhone 15 lineup, which came out amid investor concerns about spending trends and China competition.
Overall Greater China revenue came in at $15.1 billion relative to $15.5 billion a year before, whereas analysts were projecting $16.8 billion.
Chief Executive Tim Cook said on the earnings call that while the iPhone business hit a September-quarter revenue record in mainland China, Macs and iPads weighed on performance as year-ago numbers benefited from pent-up sales following earlier factory disruptions.
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Overall Mac revenue fell to $7.6 billion from $11.5 billion a year earlier, while iPad revenue dropped to $6.4 billion from $7.1 billion. The FactSet consensus was for $8.5 billion and $6.2 billion, respectively.
While Maestri called out the tough comparisons to a year-earlier period driven by pent-up demand, he also noted “challenging market conditions” for the Mac.
Wearables, home and accessories revenue came in at $9.3 billion, down from $9.7 billion a year before. Analysts were looking for $9.5 billion.
The company saw services revenue grow to $22.3 billion from $19.2 billion and exceed the FactSet consensus, which was for $21.4 billion.
“From a category standpoint, literally, we set records in each one of the big categories,” Maestri said of the services business. “We had all-time records for App Store, for advertising, for cloud, video, Apple Care, payments and a September-quarter record for music.”
The stock is up 36% so far this year, while the Dow Jones Industrial Average
DJIA
has gained about 1%.
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