Apple (AAPL) announced its fiscal Q3 earnings after the bell on Thursday, reporting iPhone sales that missed analysts' expectations while revenue fell 1.4% over last year, the third straight quarter of declines. About half of the company's overall revenue comes from its iPhone segment.
On Friday, Apple stock was down more than 2.3% in early trading, as the tech giant's gloomy results contributed to its share price decline.
Revenue has slid for multiple quarters as Mac and iPad sales have flagged. On a call with analysts, Apple CFO Luca Maestri said the company expects revenue for these products to fall by double digits from last year, citing pent-up demand from the prior year quarter after factory shutdowns.
Services was a bright spot for Apple, rising a faster-than-expected 8% from the year-ago period to an all-time high for the segment. The company also beat expectations for overall revenue and earnings per share.
Here are some of Apple’s most significant metrics compared to what Wall Street was expecting in the company’s fiscal third quarter, according to data from Bloomberg:
Revenue: $81.80 billion versus $81.55 billion expected ($82.96 billion in Q3 2022)
Adj. EPS: $1.26 versus $1.20 expected ($1.20 in Q3 2022)
iPhone revenue: $39.67 billion versus $39.79 billion expected ($40.67 billion in Q3 2022)
Services revenue: $21.21 billion versus $20.77 billion expected ($19.60 billion in Q3 2022)
Mac revenue: $6.84 billion versus $6.37 billion expected ($7.38 billion in Q3 2022)
iPad revenue: $5.79 billion versus $6.33 billion expected ($7.22 billion in Q3 2022)
Wearables revenue: $8.28 billion versus $8.38 billion expected ($8.08 billion in Q3 2022)
The quarterly report arrived just weeks ahead of Apple’s new hardware lineup, including the iPhone 15 and its next slate of smartwatches.
"We expect our September quarter year-over-year revenue performance to be similar to the June quarter, assuming that the macroeconomic outlook doesn't worsen from what we are projecting today for the current quarter," said CFO Luca Maestri.
Maestri told analysts that the company expects revenue for iPhone and services to accelerate, while Mac and iPad are expected to decline by double digits "due to difficult compares."
The company experienced a slight acceleration of performance in the Americas, Maestri said, but flagged in the US, "because the [US] smartphone market has been in a decline for the last couple of quarters."
During the call, Cook once again emphasized Apple's success in emerging markets. Revenue reached new highs in multiple countries, including India and Indonesia, Cook said.
Cook noted an acceleration in China but different consumer behavior stateside. "It's a challenging smartphone market in the US currently," he said.
Apple touted its install base of 2 billion active devices.
“We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone,” Cook said in a statement.
Apple's earnings, which arrived alongside Amazon's results on Thursday, round out the quarterly reports from the major tech companies, which featured better-than-expected results from Meta (META) and Alphabet (GOOG, GOOGL) and a revenue miss from Microsoft last week.
The tech sector has surged this year, riding optimism on cutting-edge AI technology, the resiliency of online advertising, and growth in cloud services. After wrapping up July, the tech-heavy Nasdaq Composite (^IXIC) won its fifth straight month of gains and is up almost 40% for the year.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.