Apple misses Q1 earnings expectations as iPhone sales fall short

Apple (AAPL) reported its Q1 earnings after the closing bell on Feb. 2, missing analysts’ expectations on the top and bottom line as iPhone sales came up short, declining more than 8% year-over-year.

Here are the most important numbers from the report compared to what Wall Street was expecting, as compiled by Bloomberg.

Revenue: $117.1 billion versus $121.1 billion expected

Adj. earnings per share: $1.88 versus $1.94 expected

iPhone revenue: $65.7 billion versus $68.3 billion expected

Mac revenue: $7.7 billion versus $9.72 billion expected

iPad revenue: $9.4 billion versus $7.7 billion expected

Wearables: $13.4 billion versus $15.3 billion expected

Services: $20.7 billion versus $20.4 billion expected

Apple shares were down more than 3% immediately following the report.

“As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do,” Apple CEO Tim Cook said in a statement.

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Apple faced significant headwinds throughout November and December, from COVID lockdowns and worker protests at manufacturer Foxconn’s facility in Zhengzhou, China. The plant, which employs 200,000 workers, produces the bulk of Apple’s iPhone 14 Pro and iPhone 14 Pro Max handsets.

The Pro and Pro Max, which start at $999 and $1,099, respectively, are two of Apple’s most important devices. Their steeper prices help boost the average iPhone selling price, driving higher revenues for the tech giant.

According to IDC’s Worldwide Quarterly Mobile Phone Tracker, shipments of Apple’s iPhone fell 14.9% year-over-year, from 85 million units in Q4 2021 to 72.3 million units in Q4 2022.

While iPhone sales slipped, Cook announced that there are now two billion active devices among Apple’s installed base. Mac and Wearables sales also fell year-over-year, though Apple telegraphed those declines during its Q4 earnings report.

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Despite the slowing sales, Apple has still managed to avoid large scale layoffs, unlike its peers including Microsoft, Google, and Amazon (AMZN).