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.
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