Apple: Q4 2022 Brings First Quarterly Revenue Decline Since 2016
Uninspiring sales figures in the 2022 holiday season resulted in the first quarterly revenue decline for Apple since 2016. The USD 117 billion sales were 5% less than for the same period in 2021, which reveals a sharper drop than was predicted. The figures also mark the company’s first YoY quarterly revenue fall since Q1 2019, when a corresponding decline was caused by the trade war with China.
The company’s profit is also on the downturn, even though Apple is still going relatively strong considering the overall economic situation, with total earnings of USD 30 billion (USD 1.88 per share). The results are, however, lower than the target value of USD 1.94 per share.
Investors reacted to Apple’s Q4 results at once, lowering the price of company stock by almost 5% on Thursday, when the news were published. The comments by the management made during a conference call did, on the other hand, sound hopeful.
The general outlook for the tech sector has been positive, and there has already been a 17% rise in the sector’s Nasdaq index. However, currently things are being reconsidered because of Apple’s Q4 results and the possible recession due to rising interest rates.
Another tech giant, Google also reported a YoY quarterly drop in both digital and sales sectors, confirming the existence of certain challenges in the tech sector.
Unlike some of its peers – Amazon, Meta and Microsoft, who intend to lay off over 50,000 employees in total – Apple has not revealed any layoff plans.
Tim Cook said to the analysts: “We manage for the long term. We invest in innovation and people.”
In October, he already cautioned industry analysts that the increasingly difficult economic conditions will affect holiday revenue. A few days later, he warned that China’s tough Covid-19 policy was significantly affecting its manufacturing process, and, inevitably, iPhone 14 holiday sales. All of these circumstances resulted in an 8% (USD 65.8 billion) slump in iPhone sales compared to the previous year. However, Tim Cook assures that the situation with production has recovered. Another good sign is that Apple now has a historical high of over 2 billion devices in active use.