Apple Stock Takes a Hit as iPhone and Mac Sales Decline in Latest Earnings Report

Consumer electronics giant Apple (AAPL) missed Wall Street's targets for the December quarter on Thursday night, due to declining sales of iPhones and Macs. This resulted in a fall in Apple's stock during extended trading.

The company, based in Cupertino, California, earned $1.88 per share on sales of $117.2 billion in the first fiscal quarter ending on December 31st. Analysts, surveyed by FactSet, had expected earnings of $1.94 per share and sales of $121.4 billion. On a year-over-year basis, Apple's earnings decreased by 10% and sales dropped by 5%.

Before the earnings report, analysts were worried about a potential slowdown in consumer spending on devices and online services. Additionally, Apple faced supply constraints last quarter due to Covid-related disruptions at its main iPhone factory in China.

However, Apple executives presented a positive outlook in the company's earnings news release. CEO Tim Cook stated that the company reached a significant milestone with its installed base surpassing 2 billion active devices, including iPhones, iPads, Macs, and other gadgets.

Apple Stock Drops After Holiday Quarter Report In after-hours trading, Apple's stock dropped 3.9% to $144.93. During regular trading hours on Thursday, the stock rose 3.7% to close at $150.82.

CFO Luca Maestri emphasized the growth in the company's services business. "We set a new all-time revenue record of $20.8 billion in our services business. Despite the challenging macroeconomic environment and significant supply constraints, we saw growth in total company revenue on a constant currency basis."

Apple's services revenue increased 6% YoY to $20.77 billion in the December quarter. However, hardware revenue declined 8% to $96.39 billion.

IPhone, Mac Sales Decline, But iPad Sales Increase In the December quarter, Apple's iPhone revenue decreased 8% to $65.8 billion, while Wall Street was expecting $68 billion. Smartphones accounted for 56% of the company's total sales during this period.

Mac computer sales plummeted 29% to $7.7 billion, and revenue from the wearables, home, and accessories unit declined 8% to $13.5 billion.

However, the Apple iPad business saw growth of 30% to $9.4 billion in the holiday quarter.

According to IBD Stock Checkup, Apple stock has a moderate IBD Composite Rating of 54 out of 99. This rating is a combination of fundamental and technical metrics to help investors evaluate a stock's strengths. The best growth stocks have a Composite Rating of 90 or higher.