Apple
The company also fell short in terms of expectations with regard to iPhone sales and the company's services segment. Overall, Apple shares are down 13% YTD which is slightly better than the overall market. The company's valuation also continues to improve as it grows earnings, while the stock price undergoes a correction, resulting in a forward P/E of 22 which is its cheapest in decades.
Inside the Numbers
In its fiscal Q4, Apple reported $1.29 in earnings per share which were slightly better than expectations of $1.27 per share. Revenue also beat expectations at $90.2 billion vs estimates of $88.9 billion, an 8% gain from last year. Gross margins also came in better than expectations at 42.3% vs 42.1%.
iPhone revenue missed expectations at $42.63 billion vs. $43.21 billion estimated, while Mac revenue outpaced expectations with a 25.4% increase. The company's services revenue also fell short at $19.2 billion vs expectations of $20.1 billion which was only a 5% gain from last year.
The company continues to not provide guidance which it has chosen not to since the pandemic began. However, there were hints that the company expects next quarter's revenue to continue slowing and that Mac sales would decline. Additionally, services revenue has been impacted by the weakening economic environment.
The company also faces some headwinds from the stronger dollar. According to CEO Tim Cook, growth would have been in the double digits if not for the dollar. The company also noted that supply chain pressures had very little impact in the quarter.
Like other tech companies, Apple has slowed down its hiring as its costs rise due to inflationary pressures and higher rates, pushing up borrowing costs. iPhone sales have so far been immune to economic pressures, but other smartphone companies are noting weakening demand.
