an apple missed expectations on revenue, profit and sales across multiple lines of business on Thursday, sending shares lower in after-hours trading. Apple’s overall holiday quarter sales were about 5% lower than last year, the first year-over-year decline since 2019.

Apple CEO Tim Cook said the results were driven by three factors: a strong dollar, manufacturing issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max, and the overall macroeconomic environment.

“As far as the third factor, I would say it’s just a challenging macroeconomic environment, and you’re hearing that from everybody, I think,” Cook told CNBC’s Steve Kovacs.

Apple shares fell more than 4% in extended trading after rising 3.7% on Thursday.

Here’s how Apple stacks up against Refinitiv’s consensus expectations:

  • earnings per share: $1.88 vs. $1.94 estimate, down 10.9% year-over-year
  • income: $117.15 billion vs. estimated $121.10 billion, down 5.49% year-over-year
  • Profit from iPhone: $65.78 billion vs. an estimated $68.29 billion, down 8.17% year-over-year
  • Profit Mac: $7.74 billion vs. an estimated $9.63 billion, down 28.66% from last year
  • Profit from iPad: $9.40 billion vs. estimates of $7.76 billion, up 29.66% YoY
  • Income from other products: $13.48 billion vs. estimates of $15.23 billion, down 8.3% year-over-year
  • Profit from services: $20.77 billion vs. $20.67 billion according to estimates, up 6.4% year-over-year
  • Gross profit: 42.96% vs. 42.95% marks

Apple did not provide guidance for the current quarter ending in March. It has not issued guidance since 2020, initially citing uncertainty caused by the pandemic. Analysts had expected Apple’s fiscal second quarter sales to be around $98 billion.

The quarter was a stunning miss for Apple, and its first earnings miss against consensus expectations in nearly seven years. In fact, it was only Apple’s second earnings miss since August 2017, with sales coming in more than 3% below consensus expectations.

It also represents a regression from Apple’s success over the past two years, driven by the need for new computers for work and homeschooling. It was Apple’s first year-over-year drop in quarterly revenue since 2019 and the biggest drop in annual quarterly revenue since September 2016.

Cook told CNBC that the miss was partly due to the strong dollar and that Apple was up in most markets when you controlled the 800 basis points of currency headwinds.

Cook also said that shipments of the iPhone 14 Pro and iPhone 14 Max were down significantly during the quarter, meaning there were fewer to sell to customers. Core iPhone assembly production in China was hit by a shutdown due to COVID-19 during the quarter, which Apple warned investors about in November.

“We released an update on this on November 6th, and it continued for almost all of December,” Cook said. “So we had a big hole.”

Cook said that production is now back to a level that satisfies Apple.

Cook said the difficult macroeconomic environment hurt iPhone sales, Mac sales and sales of wearables such as the Apple Watch. iPhone and Mac sales were down year-over-year. Apple’s other products category, which includes headphones like AirPods and wearables like the Apple Watch, fell more than 8%.

Cook said Mac sales were down because it was difficult to compare the quarter with last year’s quarter, in which the company released new high-end MacBook Pro notebooks. In the December quarter of this year, there were no such launches, noted Cook.

The report offered some bright spots for investors. First, Apple reported that it has 2 billion active devices, including iPhones, Macs, Apple Watches and other products. This is an increase from the 1.8 billion active devices reported last January.

The number is important to investors because it summarizes the company’s global reach and suggests that Apple can better monetize those customers through services or other complementary products.

Cook said the increase in installs was because people switched to the iPhone from Android and bought the Apple Watch for the first time.

“We attribute this to a large number of Apple Watch switches and a large number of first-time Apple Watch buyers,” Cook said. “And so obviously you need to get people who are not currently using the device to grow.”

Apple said iPad sales were up nearly 30% year-over-year after it launched an inexpensive low-end model as well as a new high-end model during the quarter. It’s a redeeming area in Apple’s hardware business and is a reversal from last December’s quarter, which saw Mac profits rise and iPads fall.

Another benefit for investors: Apple also reported 6% growth in its services business, beating analysts’ expectations.

Apple management said that cloud services, payments including Apple Pay and Apple Card, and music are strong components of services. Cook added that Apple employees are beta testing the “buy now, pay later” feature that will be part of the services.

“It will be launched soon,” Cook said.

Cook said Apple is cutting costs and hiring more slowly. Apple has not announced any layoffs unlike many of its rival technology companies.

“We are also aware that the environment we are in is complex. That’s why we cut costs. We’re cutting back on hiring, and we’re being very thoughtful and careful about the people we hire,” Cook said.

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