February 6, 2023: “On the third factor, I would say, was just the challenging macroeconomic environment, and you hear that from, I would think, everybody,” Cook said.

On Thursday, Apple shares decreased over 4% at one point during extended trading before rising after the tech giant provided data about the outlook for the current quarter. The group’s data points suggested iPhone sales won’t refuse as rapidly as they did during the holiday quarter.

Apple did not guide for the recent quarter ending in March. It has yet to teach since 2020, citing uncertainty caused by the pandemic. Analysts expected the company to show about $98 billion in sales in the second quarter’s fiscal quarter.

Nevertheless, Apple did offer some data points on performance. Chief Financial Officer Luca Maestri stated March quarter revenue would have a similar refuses trend as the December quarter. Maestri said services are expected to grow, but Mac and iPad sales will decline double digits from the period. IPhone sales will refuse less in the March quarter versus the December quarter, Apple further said.

The quarter was a miss by Apple, and its first earnings miss versus consensus anticipation in almost seven years. It was only its second revenue miss from August 2017, with sales coming in over 3% below consensus expectations. 

It represented a slump in Apple’s success more than the past two years, driven by a need for the recent computers to work and go to school from home. Apple’s first every-year quarterly revenue decline since 2019 and its most significant annual, quarterly revenue drop since September 2016.

Cook said that the miss was partial because of a strong dollar. He said Apple increased in most markets if you are being controlled for 800 basis points of foreign exchange headwinds. A basis point equals 0.01 of a percentage point.  

Cook further stated that the supply of iPhone 14 Pro and iPhone 14 Max significantly decreased during the quarter, meaning fewer phones were sold to customers. The primary iPhone assembly plant in China was affected by Covid lockdowns in the quarter, a warning made to investors.

“We put out an update on that on November 6, and it lasted through most of December,” Cook said. “So we had a big hole there.”

The Apple CEO stated that production is now back to levels Apple is comfortable with.

Cook stated that iPhone sales, Mac sales, and wearables such as the Apple Watch affected the challenging macroeconomic environment. IPhone and Mac’s sales were down year over year. Apple’s other products category, headphones such as AirPods and wearables like Apple Watch, declined by over 8%.