Apple Blames Rotten Holiday Quarter on Supply Chain, Economy
Apple Inc. reported its worst holiday performance in four years after supply snags and a softening economy hurt iPhone sales, exposing cracks in what has been one of tech's most resilient companies.
Revenue fell 5.5% to $117.2 billion in the December quarter, Apple's biggest sales period of the year, coming in well short of the average Wall Street estimate of $121.1 billion. It was Apple's first quarterly decline since 2019 and the first time the company has missed analysts' holiday sales projections since 2015.
Shares fell 3% during premarket trading in New York on Friday, the morning after Chief Executive Officer Tim Cook discussed a rebound in China, which is emerging from strict Covid-19 rules. He also said Apple's production problems have subsided.
The iPhone and Mac were particular weak spots for Apple last quarter, dragged down by a broader slump afflicting mobile devices and computers. The Covid restrictions in China added to Apple's woes, making it harder to ship enough of the most popular versions of the iPhone. Timing was another issue: The company didn't launch new Macs and HomePods until recent weeks, missing the end of the holiday quarter.
“The world continues to face unprecedented circumstances — from inflation to war in Eastern Europe to the enduring impacts of the pandemic — and we know that Apple is not immune to it,” Cook said on a conference call. “But whatever conditions we face, our approach is always the same. We are thoughtful and deliberate.”
Earnings came in at $1.88 per share during the fiscal first quarter, which ended Dec. 31. That compared with an average estimate of $1.94 per share.
The Cupertino, California-based technology giant didn't provide a detailed outlook for the second
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