Apple Posts Holiday Quarter Declines In Profit And Revenue

Apple Inc. (NASDAQ: AAPL) just reported its worst performance during the holiday quarter in roughly a decade. Profits for the quarter ended in December fell to $19.97 billion, down from roughly $20 billion in the same quarter last year. Revenue came in at $84.3 billion for the quarter, which is year-over-year decline of 4.5 percent from the same quarter last year. That was slightly above analysts’ average estimate of $84 billion. 

The results were largely in line with a preannouncement Apple provided earlier this month. CEO Tim Cook warned that revenue would be about $84 billion for the holiday period. That was lower than its previous estimate of revenue between $89 billion and $93 billion.

This was the company’s first annual revenue decline during a holiday season quarter since 2001. Apple has said 100 percent of that decline was driven by performance in China. Greater China revenue declined 26 percent to $13.17 billion for the quarter. The company earned nearly $5 billion more in the region in the same quarter of last year.

A 15 percent drop in revenue from Apple’s flagship iPhones during the holiday period didn’t help matters. The company posted $51.9 million in iPhone revenue for the quarter. Cook said on the company’s earnings call, “Our customers are holding on to their older iPhones a bit longer than in the past.”

Apple’s Wearables, Home and Accessories category was the fastest-growing revenue segment during the quarter, growing 33 percent from the year-ago period. Revenue for the Mac grew 9 percent, and revenue for the iPad grew 17 percent. Revenue for the company’s services segment grew 19 percent year-over-year.

During the earnings call, Apple gave a weaker-than-expected sales-and-profit forecast for its fiscal second quarter. The company now expects revenue between $55 billion and $59 billion for the current quarter ending in March. That would mean earnings of between $2.13 and $2.51 a share, below analysts’ average estimate of $2.62 a share. In the second quarter of last year, the company earned $2.73 a share.