Apple reported revenues for its fiscal first quarter to December of USD 84.3 billion, down 5 percent from a year earlier, in line with its warning early this month. Earnings were still up 7.5 percent to USD 4.18 per share, in line with market estimates and driven by lower taxes and fewer shares after the company's buyback programme.
The company forecast a continued decline in revenue in fiscal Q2, to USD 55-59 billion from USD 61 billion a year earlier. The gross margin is expected largely stable, at 37-38 percent compared to 38 percent in Q1. Apple left its quarterly dividend unchanged, at USD 0.73 per share.
iPhone revenues down 15%
As flagged in its last quarterly report, Apple did not provide any unit sales figures. The company said revenue from the iPhone declined 15 percent from the prior year to USD 52 billion, while total revenue from all other products and services grew 19 percent. Services revenue reached a new high of USD 10.9 billion, up 19 percent, and revenue from Macs and wearables, home products and accessories also set new records, growing 9 percent and 33 percent, respectively, while revenue from iPads grew 17 percent.
On a geographic basis, the biggest slump was in the Greater China region, as flagged by Apple in its earlier warning. Revenues there fell 26.7 percent to USD 13.2 billion. Sales were also down in Europe, by 3.3 percent to USD 20.4 billion, and fell 4.5 percent in Japan to USD 6.9 billion.
CEO Tim Cook acknowledged it was "disappointing" to miss the group's previous guidance, but said the results "demonstrate that the underlying strength of our business runs deep and wide". The active installed base of devices reached a new record of 1.4 billion in the quarter, growing in each of its geographic segments and helping drive the strong growth in services revenue, he added. The total included 900 million active iPhone users.
Apple plans to report active users more in future, as well as subscribers to paid services. At the end of December, the company had 360 million subscribers to both its own and third-party services. The company aims to grow to 500 million paid subscribers by the end of 2020.
Price differences
In a conference call on the results, Cook said the company was working to address the slowdown in iPhone revenues. In addition to the weaker economy in China, the sales are affected by the stronger US dollar versus other currencies, especially in emerging markets such as Turkey, and fewer operator subsidies, mainly in mature markets such as Japan and the US. To offset the latter, the company is expanding its trade-in offers and providing installment financing in some markets.
The stronger dollar was making new iPhone models as well as some services appear more expensive in foreign markets, the CEO noted. Apple started in January adjusting its pricing to try and bring iPhone models more in line with its pricing of a year ago, absorbing the forex difference, Cook said.
