Consumer electronics giant Apple’s (AAPL) stock is down 2% after the company reported financial results that showed declining sales for hardware products such as the iPhone.
The Silicon Valley-based company still managed to beat Wall Street expectations, announcing earnings per share (EPS) of $1.26 U.S. versus $1.19 U.S. that was anticipated, according to Refinitiv data.
Revenue in what was Apple’s fiscal third quarter came in at $81.80 billion U.S. compared to $81.69 billion U.S. that had been estimated among analysts.
However, the positive results were largely driven by stronger sales of the company’s services such as its App store and Apple TV, which grew 8% on an annual basis.
Overall, Apple’s revenue was down 1% year-over-year as sales of the company’s iPhone, Mac computer, and iPad each declined from a year earlier.
Breaking down the sales by product, Apple reported the following:
• iPhone revenue: $39.67 billion U.S. vs. $39.91 billion U.S. estimated, down 2%
• Mac revenue: $6.84 billion U.S. vs. $6.62 billion U.S. estimated, down 7%
• iPad revenue: $5.79 billion U.S. vs. $6.41 billion U.S. estimated, down 20%
• Services revenue: $21.21 billion U.S. vs. $20.76 billion U.S. estimated, up 8%
The company also reported gross margins of 44.5%, which was ahead of the 44.2% estimated by analysts who track the stock.
Apple didn’t provide forward guidance. The company hasn’t provided any outlook since the Covid-19 pandemic began in 2020, citing uncertainty.
However, company executives said on an earnings call with analysts and media that they expect sales to improve as we move through the second half of the year, though revenue is likely to dip in the current quarter.
Other highlights from Apple’s earnings include growing sales in China as that country puts the pandemic behind it, and news that the company now has $166.5 billion U.S. of cash on hand.
In coming months, Apple plans to release its new Vision Pro virtual reality headset, the company’s first completely new product in more than a decade.
Executives said the company plans to provide live demonstrations of the headset at Apple stores around the world.
Prior to today (August 4), Apple’s stock had increased 53% this year and was trading at $191.17 U.S. per share.
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