Apple reports first decline in revenues and profits in over a decade
Apple reported its first decline in revenues and profits in over a decade on Tuesday.
Weak iPhone sales and a downturn in China reduced the tech company’s revenue by 4.5% to $84.3bn in the three months ending 29 December compared with the same period last year. Profits fell slightly to $19.97bn.
Revenues from China were $13.17bn during the quarter, a drop of nearly $5bn from a year ago.
The results came three weeks after Apple shocked investors with its first profits warning since 2002.
It has been a trying month for Apple. On 3 January Apple cut its sales forecasts for the key end of year period citing the “magnitude” of the economic slowdown in China. It was the first profits warning Apple has made since it launched the iPhone, a product that propelled the company into the top tier of tech companies and briefly made it the most valuable company in history.
The warning wiped $55bn (£44bn) off the company’s value, led to its shares being briefly suspended and rattled investors worldwide as analysts began to worry about how other companies might be hit by China’s slowing growth.
Apple’s share price has since recovered but remains $266bn less than the record-breaking $1tn the company was valued at in August, the first company ever to be valued that high.
The results also come a day after Apple scrambled to fix a glitch with iPhone’s FaceTime, a video chat application, that allowed users to listen in on the people they were calling when they did not pick up the call.
The company was forced to disable its Group FaceTime feature after it was revealed the bug allowed people to listen to the people they were calling before they answered their phone.
Apple’s share price rose over 6% in after hours trading following the release of its latest financials.
The numbers were broadly in line with analysts’ expectations and iPhone revenues were higher than expected.
Leading Apple analyst Ming-Chi Kuo has predicted that the worst may be over for Apple. The TF International Securities analyst expects shipments of iPhones to beat market expectations in the next quarter.