Apple reported Thursday that revenue fell 1% to $81.8 billion for the fiscal quarter ending July 1, the third consecutive year-over-year decline for the world’s most valuable company.
Apple fiscal quarter ending July 1
However, there were some bright spots. The company announced that its services revenue had reached an all-time high of $21.2 billion.
Apple’s services business, which includes Apple Music and Apple TV+, is becoming an increasingly important revenue generator for the company. Furthermore, Apple’s results narrowly exceeded Wall Street’s revenue and profit estimates.
iPhone revenue was $39.7 billion for the quarter, representing a 2% year-over-year decline. Mac revenue fell 7% to $6.8 billion for the quarter, while iPad revenue fell nearly 20%. (The new iPad Air was released in the same quarter.)
Apple shares fell more than 1% in after-hours trading Thursday. However, the stock has increased by 50% since the beginning of the year.
CEO Tim Cook praised the rosy services figure and strong performance in emerging markets in a statement accompanying the earnings results.
“We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone,” Cook said.
On a call with analysts Thursday, Cook added, “We continue to face an uneven macroeconomic environment, including nearly four percentage points of foreign exchange headwinds.”
“Looking ahead, we’ll continue to manage for the long term, always pushing the limits of what’s possible and always putting the customer at the center of everything we do,” Cook said.
Apple’s June quarter is traditionally the slowest of the year for the tech behemoth, which releases new iPhone models in September.
Customers frequently postpone upgrading until new models are released. In addition, the quarter concludes before back-to-school shopping and the lucrative December holidays.
The latest earnings report comes as PC and smartphone sales continue to fall after a brief surge in the early days of the pandemic. According to preliminary Gartner data released last month, global PC shipments fell 16.6% in the third quarter.
Meanwhile, global smartphone shipments fell 7.8% last quarter compared to the same period the previous year, according to separate preliminary data released last week by market research firm IDC.
“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Jesse Cohen, senior analyst at Investing.com.
“Investors appear to be reacting to the slight miss in iPhone sales, but I wouldn’t read too much into it as many consumers are holding out until the next iPhone release.”
Looking ahead, On the call, Apple’s CFO Luca Maestri stated that the company expects year-over-year revenue performance in the September quarter “to be similar to the June quarter,” assuming the macroeconomic outlook does not worsen.
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