Apple on Thursday posted its first quarterly revenue drop in nearly four years after pandemic-driven restrictions on its China factories curtailed sales of the latest iPhone during the festive season.
The company’s sales of $117 billion for the October-December period represented a 5% decline from the same time in the previous year, a deeper downturn than analysts had projected.
It marks Apple’s first year-over-year decrease in quarterly revenue since the January-March period in 2019 when sales also slipped 5% amid slowing iPhone demand and the fallout of a trade war with China that was being waged by then-president Donald Trump.
Apple’s profit also eroded during the past quarter, even though the Cupertino, California, company remained a pillar of prosperity.
Earnings totalled $30 billion, or $1.88 per share.
Those results missed a target of $1.94 per share set by analysts polled by FactSet Research.
Investors reacted to the letdown by driving down Apple’s stock by nearly 5% in Thursday’s extended trading. That reversed a recent rally that had recently lifted Apple’s shares, which lost more than a quarter of their value last year amid a broad slump in technology stocks.
Despite the quarterly downturn in its fortunes. Apple has not signalled any intention to resort to mass layoffs — a stark contrast to its peers in technology.
Industry giants Alphabet, Microsoft, Amazon and Meta Platforms have announced plans to jettison more than a combined 50,000 employees as they adjust to revenue slowdowns or downturns caused by people’s lessening dependence on the digital realm as the pandemic has eased.
Apple CEO Tim Cook had also braced investors for a rougher ride in late October when he warned of “increasingly difficult economic conditions” heading into the festive season.
Then, just a few days later, Apple cautioned that China’s attempts to clamp down on the spread of Covid was affecting its production lines and would prevent meeting all the demand for the premium iPhone 14 models during the festive season.
That contributed to an 8% decrease in iPhone sales from the previous year to $65.8 billion dollars in the most recent quarter.