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Investors Business Daily
Investors Business Daily

Apple Misses December-Quarter Targets As iPhone, Mac Sales Fall

Consumer electronics giant Apple late Thursday missed Wall Street's targets for the December quarter amid declining iPhone and Mac sales. Apple stock fell in extended trading.

The Cupertino, Calif.-based company earned $1.88 a share on sales of $117.2 billion in its fiscal first quarter ended Dec. 31. Analysts polled by FactSet had expected earnings of $1.94 a share on sales of $121.4 billion. On a year-over-year basis, Apple earnings fell 10% while sales dropped 5%.

Ahead of Apple's earnings report, analysts fretted about a possible slowdown in consumer spending on devices and online services. Also, Apple suffered supply constraints last quarter from Covid-related disruptions at its main iPhone factory in China.

Apple executives accentuated the positive in the company's earnings news release.

Chief Executive Tim Cook noted that the company passed a major milestone with its installed base reaching more than 2 billion active devices. That includes iPhones, iPads, Macs and other gadgets.

Apple Stock Drops After Holiday-Quarter Report

In after-hours trading on the stock market today, Apple stock dropped 3.9% to 144.93. During the regular session Thursday, Apple stock rose 3.7% to close at 150.82.

Chief Financial Officer Luca Maestri highlighted growth in the company's services business.

"We set an all-time revenue record of $20.8 billion in our services business," Maestri said. "And in spite of a difficult macroeconomic environment and significant supply constraints, we grew total company revenue on a constant currency basis."

Apple's services revenue increased 6% year over year to $20.77 billion in the December quarter. But hardware revenue declined 8% to $96.39 billion.

IPhone, Mac Sales Drop, But iPad Sales Rise

In the December quarter, Apple's iPhone revenue sank 8% to $65.8 billion. Wall Street was looking for $68 billion. Smartphones accounted for 56% of the company's total sales in the period.

Meanwhile, Apple's Mac computer sales tumbled 29% to $7.7 billion. And revenue from Apple's wearables, home and accessories unit declined 8% to $13.5 billion.

Apple iPad business bucked the downtrend, growing 30% to $9.4 billion in the holiday quarter.

Apple stock has a middling IBD Composite Rating of 54 out of 99, according to IBD Stock Checkup.

IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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