Apple on Thursday saw it stock wobble in after hours trading as it released earnings the eve before releasing its riskiest product in years.
Overall, Apple posted its first increase in revenue in a year, but China was a weak spot: Revenue in the region slid 13% from last year. In contrast, sales increased in Europe and Japan.
The company’s fourth-quarter earnings come just one day before Apple begins selling one of its riskiest new hardware releases in recent years: An augmented reality headset, the Vision Pro.
Over the past five years, Apple has spent an estimated $100 billion in research and development on the device, which will cost $3,499 in the US, according to a recent analysis.
In a statement, Apple CEO Tim Cook said the company’s fourth quarter growth was fueled by iPhone sales and an all-time revenue record in the company’s services division.
“We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments,” Cook said.
Net iPhone sales grew from $65.7 billion one year ago to $69.7 billion in the fourth quarter, but Jesse Cohen, a senior analyst at Investing.com, said that China’s revenue numbers indicate demand for the device in the region is slowing “more than expected in the fact of rising competition from local companies, including Huawei.”
“The big question is if this is just a blip, or signs of a bigger shift among consumers as rising interest rates and a weaker economic backdrop discourage consumers from making pricey purchases,” Cohen said.
Apple saw an earnings per share of $2.18, a record for EPS for the company and higher than the $2.11 analysts had predicted.
Revenue also beat analysts’ expectations for the quarter at $119.6 billion.
Despite beating expectations on both the top and bottom lines, Apple’s stock dropped more than 2% after the market close. The debut of the Vision Pro dominated much of a question session with analysts and executives Thursday.
“This has been multiple years of efforts from so many people across Apple,” Cook said of the Vision Pro on Thursday’s earnings call. “It really took a whole company effort to bring it this far.”
This is a developing story. Check back for updates.
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