Consumer electronics giant Apple (AAPL) has posted its biggest quarterly revenue drop since 2016 as its sales during the December holiday season came in 5% lower than a year earlier.
Apple’s overall sales for the fourth and final quarter of 2022 posted their first year-over-year decline since 2019.
Chief executive officer (CEO) Tim Cook blamed the disappointing results on a strong U.S. dollar, ongoing production issues in China, and a deteriorating economic environment.
Apple’s Q4 earnings per share (EPS) came in at $1.88 U.S. versus $1.94 U.S. that was expected, down 10.9% from a year ago.
Revenue in the quarter amounted to $117.15 billion U.S. compared to $121.10 billion U.S. expected on Wall Street, a 5.49% year-over-year drop.
iPhone revenue fell 8.17% to $65.78 billion U.S. in Q4, while revenue from Mac computers declined 28.66% to $7.74 billion U.S.
On the flipside, iPad revenue grew 30% during the fourth quarter to $9.4 billion U.S. and revenue from services such as Apple Pay and Apple TV increased 6.4% from a year earlier to $20.77 billion U.S.
As is typical, Apple did not provide any forward guidance for the current first quarter of 2023. The company hasn’t provided guidance since the pandemic began in 2020. However, analysts expect about $98 billion U.S. in sales for the quarter ended on March 31 of this year.
Apple CEO Cook said the earnings miss was largely due to a strong U.S. dollar. At the same time, the supply of iPhone 14 Pro and iPhone 14 Max devices was reduced during Q4 as the company’s primary iPhone assembly plant in China was impacted by COVID-19 lockdowns.
Cook said iPhone production is now back to normal levels and added that Apple is cutting costs and has slowed hiring. To date, Apple has avoided laying off employees.
Apple’s stock declined 3% following news of its latest financial results. The company’s stock is down 13% over the past 12 months at $150.82 U.S. per share.
