Apple’s Q1 2023 Earnings Miss Expectations Due to Weak iPhone Sales and Shortages

Apple’s much-anticipated earnings for the October-December period (fiscal Q1 2023) are out, covering the all-important holiday shopping season and the first full quarter of iPhone 14 availability. The quarter was heavily impacted by supply chain shortages, leading to a 5% decline in revenue and a 13% drop in net income compared to the same quarter a year ago.

Analysts had been pessimistic in their predictions, expecting total revenue of $122.85 billion, around $1 billion lower than Q1 2022. This was due to the supply constraints on the iPhone 14 Pro and iPhone 14 Pro Max, which Apple warnedinvestors about in November.

Breakdown of revenue by product category for Q1 2023

Looking at the breakdown of revenue by product category for Q1 2023, as compared to Q1 2022, this is what we get: iPhone ($65.78 billion vs. $71.63 billion), Mac ($7.74 billion vs. $10.85 billion), iPad ($9.40 billion vs. $7.25 billion), Wearables, Home, and Accessories ($13.48 billion vs. $14.70 billion), and Services ($20.78 billion vs. $19.50 billion).

Apple CEO Tim Cook and CFO Luca Maestri praised the company's performance despite the difficult circumstances. Cook said they have the "best lineup of products and services ever". At the same time, Maestri highlighted the record-breaking revenue of $20.8 billion in the Services business, and that the company generated $34 billion in operating cash flow and returned over $25 billion to shareholders.

You can read Apple’s total earnings release on Apple Newsroom, and listen to the earnings call with Tim Cook and Luca Maestri live on the company’s Investor Relations website at 2:00 pm PT/5:00 pm ET. AAPL share prices are sliding in after-hours trading, down as much as 5%.