Apple's Earnings Hit by China's COVID-19... Revenue Declines for the First Time in 4 Years

First Sales Decline Since 2019

[Asia Economy Reporter Haeyoung Kwon] Apple, the world's number one smartphone company, posted disappointing results in the fourth quarter of last year that fell short of market expectations. Revenue decreased for the first time since 2019, and both net profit and sales volume missed market forecasts.

Apple announced on the 2nd (local time) that its revenue for the fourth quarter of last year was $117.2 billion. This represents a 5% decrease compared to the previous year, marking the first revenue decline since the first quarter of 2019. It also fell short of the market forecast of $121.1 billion compiled by financial information firm Refinitiv.

Fourth-quarter earnings per share were $1.88, also below the market forecast of $1.94. This is the first time since 2016 that the confirmed quarterly net profit has fallen short of market expectations.

[Image source=Yonhap News]

Both smartphone and PC sales declined. iPhone revenue for the fourth quarter of last year was $65.775 billion, down 8.2% year-on-year. Mac revenue also shrank by 28.7% during the same period, totaling $7.735 billion. The cause is analyzed to be production disruptions at local factories in China due to the spread of COVID-19 in the fourth quarter of last year, which led to sluggish year-end sales.

Apple CEO Tim Cook explained, "The strong dollar, production issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max, and the overall macroeconomic environment had an impact."

Apple's stock price fell nearly 4% in after-hours trading following the earnings announcement.