During the first three months of 2023, Apple’s total revenue dropped 3% year over year. iPhone was a bright spot, but revenue from virtually all of the company’s other product segments saw annual declines. CEO Tim Cook blamed the drop on a “challenging macroeconomic environment.”
While the financial news isn’t good, Wall Street had been expecting it to be even worse. AAPL is up in after-hours trading on the news.
Apple: Not as bad as it could have been
The March quarter is usually a relatively strong one for Apple, with many customers still buying the devices that launched the previous quarters. Not this year.
But it could have been worse. Despite the revenue drop, Apple reported that its quarterly earnings per diluted share were $1.52, unchanged year over year, and revenue was $94.8 billion. Analysts had predicted the iPhone-maker’s quarterly earnings per diluted share would be only $1.43, and total company revenue had been expected to be lower, at $93 billion.
Looked at the right way, this was an improvement: revenue during Apple’s December quarter dropped 5% because of macroeconomic conditions.
Apple executives found some other bright spots.
“We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” said Tim Cook, Apple’s CEO, in a statement. “We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030.”
But Apple financial results could have been a lot better
Under ordinary circumstances, the January-through-March 2023 period could have brought in boffo results. Apple took the unusual step of launching new Macs at the start of this year. The 14- and 16-inch MacBook Pro and Mac mini were all refreshed with M2, M2 Pro or M2 Max processors. But revenue from Mac sales declined 31% year over year, to $7.2 billion.
iPad revenue also dropped during the March quarter, if not as much — 13%. Still, Mac and iPad revenue are both higher than they were before the surge brought on by the pandemic.
As noted, iPhone was the standout success in Apple’s quarterly financial results. Revenue from iOS handsets grew 2%.