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Apple falls in after-hours trading as iPhone sales and services miss estimates

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Apple, iPhone, services, earnings report, sentiment – topics of conversation

  • Shares of Apple, Inc. fell nearly 6% in after-hours trading on poor earnings numbers
  • Mac sales rebounded strongly, but services and iPhone sales disappointed estimates
  • A rough mic could keep the stock price low in the short term

Apple Inc reported fourth-quarter diluted earnings per share (EPS) of $1.29 on revenue of $90.15 billion, beating the Bloomberg consensus estimate of $1.26 on $88.63 billion. Revenue from the iPhone maker’s services rose to $19.19 billion, slightly below analysts’ expectations of $19.97 billion. That was also below third-quarter service revenue of $19.6 billion and is likely the main reason the stock fell during extended trading. Apple recently raised the price of Apple Music and Apple TV+, which should help boost those numbers in the coming quarters.

iPhone sales came in at $42.63 billion, versus expectations of $42.66 billion, and up from $40.66 billion in the fiscal third quarter. Wearables, including EarPods and the iWatch, added $9.65 billion, a bright spot, beating expectations of $8.8 billion. The company’s performance in China was a little disappointing, with revenue in China totaling $15.47 billion.

Mac sales came in at $11.5 billion, well above estimates of $9.24 billion and up sharply from $7.38 billion in the third quarter, when Mac sales fell more than 10% year-over-year. With consumers under pressure from higher rates, the outlook for the discretionary products that make up Apple’s product portfolio is bleak. An upcoming earnings call should provide further direction for the stock price. Amazon falls sharply in trading after a disappointing report.

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Apple – 1 minute chart

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— Posted by Thomas Westwater, DailyFX.com analyst

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https://www.dailyfx.com/news/apple-falls-in-after-hours-trading-as-iphone-sales-services-miss-estimates-20221027.html

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