Apple Stock Plummets Over 4% as Weak iPhone Sales Outlook Casts Shadow on Strong Q1 Earnings

Declining Sales in China and Cautionary iPhone Guidance Contribute to Stock Market Downturn


In the aftermath of Apple’s fiscal first-quarter earnings report, which surpassed revenue and earnings estimates, the tech giant’s stock faced a substantial dip of more than 4%. The decline was triggered by concerns over a 13% drop in sales in China, coupled with cautious guidance on iPhone sales for the current quarter.

For the quarter ending December 30, Apple reported earnings per share of $2.18, outpacing the expected $2.10, and revenue of $119.58 billion, beating the anticipated $117.91 billion. While several product lines met or exceeded expectations, the spotlight fell on iPhone revenue, which amounted to $69.70 billion against the predicted $67.82 billion.

However, Apple’s outlook for the upcoming quarter, ending in March, raised eyebrows as the company refrained from providing specific guidance. Apple CFO Luca Maestri indicated that iPhone sales for the March quarter would likely mirror last year’s $51.33 billion, excluding $5 billion attributed to supply recovery from COVID-19 shutdowns.


Despite posting 2% sales growth in the December quarter, breaking a streak of four consecutive quarters with annual revenue declines, Apple’s shares faced a notable downturn in after-hours trading. The company’s gross margin nearly touched 46%, and net income reached $33.92 billion, marking a 13% increase from the same period in the previous year.

Apple CEO Tim Cook emphasized that the growth rates represented a “huge acceleration” from the last quarter. However, concerns arose as Apple acknowledged the shorter duration of this year’s December quarter compared to the previous year.

The performance of Apple’s diverse product lines varied. iPhone sales, driven by the newly released iPhone 15 models, grew nearly 6%. The services business, a focal point for investors, reported revenue of $23.11 billion, marking an 11% increase. Apple noted over 1 billion paid subscriptions and highlighted growth in advertising, cloud services, payments, and the App Store.

Amid the positive outcomes, Mac sales grew marginally, while iPad sales faced a significant slump, declining 25%. The wearables business, including AirPods and Apple Watch, experienced an 11% YoY decline, attributed in part to a brief removal of the latest Apple Watches from stores due to a patent dispute.

The noticeable drop in Apple’s Greater China sales, nearly 13% lower than the same period last year, raised concerns about receding demand in the region. Tim Cook addressed the issue, attributing it to currency exchange rates and stating that, in constant currency, the decline would be a mid-single digit number.

As Apple navigates a complex landscape of fluctuating sales and global economic factors, investors and industry analysts are closely watching for further developments and the company’s strategic moves to address emerging challenges.