The Mercury News Weekend

Slow economy hits Apple's bottom line

- By Mark Gurman

Apple reported a steeper sales decline in its holiday period than Wall Street feared, showing the toll of an economic slowdown and lingering supply snags.

Revenue in the fiscal first quarter amounted to $117.2 billion, the company said in a statement Thursday. That compared with Wall Street projection­s of about $121.1 billion. The shares fell in extended trading.

The results show that Apple hasn't been able to dodge the tech slowdown afflicting many of its competitor­s. Demand for smartphone­s and computers has slumped in the past year, and COVID-19 restrictio­ns in China added to Apple's woes during the holiday sales period.

Timing was another issue: The company didn't launch new Macs and HomePods until recent weeks, missing the end of the first quarter.

Earnings came in at $1.88 per share, compared with an average estimate of $1.94 per share. The Cupertino, California-based technology giant didn't provide a revenue outlook for the second quarter, continuing an approach it adopted at the start of the Covid pandemic in 2020.

Apple shares had closed up 3.7% at $150.82 in New York. They have gained 16% this year.

Chief Executive Officer Tim Cook cited a “challengin­g environmen­t” in the statement. “We remain focused on the long term,” he said.

Apple generated $65.8 billion from its flagship product, the iPhone, missing the estimate of $68.3 billion.

That also represents a decline the $71.6 billion that the product brought in a year earlier. While the latest iPhone was a more significan­t leap than the previous version, the factories producing the popular Pro models in China were shuttered for several weeks during the quarter due to pandemic restrictio­ns.

The company made $7.74 billion from the Mac, well short of the $9.7 billion estimate. That's also a significan­t drop from $10.9 billion a year ago.

It was a tough year-overyear comparison given that Apple launched a revamped MacBook Pro line in the previous holiday period. This time around, it didn't update the MacBook Pro and Mac mini models until the current quarter.

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