Apple Inc. (NASDAQ: AAPL) reported its first quarter financial results after market closes on Tuesday and topped estimates for both earnings and revenue, however, the Company missed iPhone revenue estimates. Despite the iPhone estimate miss, Apple shares rose by 5.7% during after hours.
For the first quarter, Apple reported earnings of USD 4.18 per share, narrowly edging estimates of USD 4.17 per share. Revenue was reported at USD 84.3 Billion compared to estimates of USD 83.97 Billion.
Apple’s total revenue for quarter fell by 5% year-over-year, which marked the Company’s first decline during holiday season quarter since 2001, according to CNBC.
Apple reported iPhone revenue of declined by 15% year-over-year to USD 51.98 Billion, lower than Refinitiv analysts’ estimates of USD 52.67 Billion. Services revenue reached an all-time high of USD 10.9 Billion compared to estimates of USD 10.87 Billion.
Apple also saw strong growth from its Mac and Wearables, Home and Accessories segments. The two segment reached all-time highs, growing at 9% and 33%, respectively. Revenue from iPads increased by 17%.
The Company said that international sales were the main driver for its quarterly results. Apple said that international sales accounted for 62% of the revenue in the quarter.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Tim Cook, Apple’s Chief Executive Officer. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”
Apple shares plummeted earlier this month after Cook slashed the Company’s first quarter guidance. Cook lowered Apple’s guidance for this quarter from the range of USD 89 Billion and USD 93 Billion to USD 84 Billion. Despite the lowered forecast, Apple still surpassed its own expectations.
Cook highlighted in the letter to investors earlier this month that the timing release of the latest iPhones as well as financial impacts resulted from China. Cook said that China’s slowing economic growth was a major factor to the guidance slash.
Cook mentioned in the earnings call for this quarter that consumers are holding onto their older iPhone models longer than in the past. In combination with slowing macroeconomic factors, Cook said that resulted in the iPhone sale decline.
“For perspective, despite the challenging December quarter, our revenue from China grew slightly for the full calendar year,” Cook said in the earnings call. “Macroeconomic factors will come and go, but we see great upside on continuing to focus on the things that we can control.”
As for the second quarter, Apple is forecasting revenue between USD 55 Billion and USD 59 Billion. Refinitiv analysts are expecting revenue of USD 58.83 Billion.