By
Godfrey Benjamin
April 26th, 2024
Apple stopped sharing performance guidance during the COVID-19 era and the firm declined to do so also this time.
American multinational technology giant Apple Inc (NASDAQ: AAPL) has shared its last quarter performance report in which it recorded a slip in revenue below analysts’ expectations. The company reported a total revenue of $117.15 billion as against the $121.10 billion estimated, down 5.49% year over year consensus from Refinitiv.
Apple reportedly buckled under the weight of three key factors according to its Chief Executive Officer Tim Cook. Speaking to CNBC, the tech guru noted the strong US dollar, macroeconomic headwinds, and the problems encountered at its factory in China due to COVID-19 lockdowns.
“On the third factor, I would say was just the challenging macroeconomic environment, and you’re hearing that from, I would think, everybody,” Cook told CNBC’s Steve Kovach.
According to the CEO, the Chinese-related problems resulted in a slowdown in the production of the iPhone 14 Pro and the iPhone 14 Pro Max, the latest in its high-end series. The company said the headwinds stirred a stiffened supply which placed the iPhone revenue below expectations. The revenue is pegged at $65.78 billion as against analysts’ expectations of $68.29 billion. The revenue is down by 8.17% when compared to the year-ago period.
The company recorded significant earnings slumps across its top and bottom lines with the Earnings Per Share (EPS) coming in at $1.88 against the $1.94 estimated, down 10.9% year over year.
The revenue slump comes off as Apple’s first year-over-year sales decline since 2019 and the largest revenue drop since 2016. Apple is known for its impressive performance as the most valuable publicly listed company in the world. This past quarter’s revenue slump is an indication that Apple is not immune to the current global turmoil tech giants are experiencing across the board.
Apple Revenue Projection for Current Quarter
Apple stopped sharing performance guidance during the COVID-19 era and the firm declined to do so also this time. However, the company shared some data on what to expect for the current quarter. According to Chief Financial Officer Luca Maestri, the March quarterly revenue will also record a slight decline, however, services are expected to grow.
While Apple’s $7.74 billion Mac revenue is down from the $9.63 billion estimated, the company’s gross margin of 42.96% is slightly higher compared to the 42.95% estimated.
At the moment, Apple has a total of 2 billion active devices, up from 1.8 billion active devices as of January 2022. This is an important metric as it shows how widespread the company’s products are.
“We attribute that to having a lot of switchers and a lot of first-time buyers in the case of the Apple Watch,” Cook said. “And so obviously you need to bring in people that are not currently active on a device in order to grow.”
With the performance revelation, Apple’s shares plunged in the after-hours session as it is down by 3.20% to $145.99.