Apple Stock Declines as iPhone Sales Experience Third Consecutive Quarterly Drop

Apple's Q3 Earnings Exceed Expectations Despite Sales Slump, Stock Price Takes a Hit

In a report that raised concerns among investors, Apple Inc. (AAPL) announced a decline in sales for the third consecutive quarter, causing its stock price to drop in after-hours trading. The consumer electronics giant released its fiscal third-quarter earnings, showcasing mixed results for the period ending July 1.

Despite analysts' expectations, Apple reported earnings of $1.26 per share on revenue amounting to $81.8 billion. While the earnings exceeded estimates, sales figures matched the projected amount. Comparing year-over-year performance, Apple saw a 5% increase in earnings, but its sales dropped by 1%.

The decline in sales was attributed primarily to a drop in hardware revenue, with Apple's hardware sales falling by 4.4% year over year to $60.58 billion. Specifically, the iPhone, which is a significant contributor to the company's revenue, experienced a 2% decline in revenue, amounting to $39.67 billion and accounting for 48% of Apple's total sales.

The Mac computer and iPad tablet sales also took a hit, with the former falling by 7% to $6.84 billion, and the latter experiencing a slide of nearly 20% to $5.79 billion in revenue.

Despite the challenging sales figures, Apple's services revenue showed promise, rising by 8.2% to $21.21 billion in the same quarter. Additionally, the wearables, home, and accessories unit of the company witnessed a 2% increase in revenue, reaching $8.28 billion.

Chief Financial Officer, Luca Maestri, highlighted the positive aspects of the report, stating, "Our June quarter year-over-year business performance improved from the March quarter." He also emphasized the company's commitment to long-term growth plans and its efforts in generating strong operating cash flow of $26 billion. Furthermore, Apple returned over $24 billion to shareholders during the quarter, showcasing a commitment to investor value.

However, despite these positive aspects, investors seemed concerned about the continuous decline in sales. Apple's stock price dipped 1.5% to $188.39 in after-hours trading following the release of the report. During the regular trading session on the same day, Apple stock also experienced a 0.7% decrease, closing at $191.17.

As the technology giant faces challenges in sustaining iPhone sales growth, analysts and investors closely monitor Apple's strategies to navigate the evolving market and reignite revenue growth.