Apple reports iPhone revenue decline of 15 percent in Q1

The anticipated weak iPhone sales resulted in Apple's first year-over-year decline in Q1 revenues a decade.

Apple published its first quarter FY 2019 financial results on Tuesday, coming in line with market expectations. iPhone revenue declined 15 percent from the year prior, but services revenue grew by 19 percent to an all-time high of $10.9 billion.

For Q1, non-GAAP earnings came to $4.18 per share on revenue of $84.3 billion, a decline of 5 percent from the year-ago quarter,

Analysts were expecting earnings of $4.17 per share on revenue of $84 billion.

The top and bottom line numbers were not much of a surprise, given that Apple lowered its Q1 revenue guidance to $84 billion earlier this month. In November, Apple said it expected Q1 revenue between $89 billion and $93 billion, but it lowered expectations, citing rough Chinese market conditions and fewer iPhone upgrades than expected.

"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," CEO Tim Cook said in a statement. "Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That's a great testament to the satisfaction and loyalty of our customers, and it's driving our Services business to new records thanks to our large and fast-growing ecosystem."

apple.png

Specifically for the quarter, iPhone sales came in at $51.98 billion, down from $61.1 billion a year prior. However, total revenue from all other products and services grew 19 percent. Revenue from Mac grew 9 percent to $7.4 billion. Wearables, Home and Accessories revenue grew 33 percent to $7.3 billion. iPad revenue grew 17 percent to $6.7 billion.

International sales accounted for 62 percent of the quarter's revenue. However, sales were down year-over-year in every international segment. Cook noted in a conference call Tuesday that "the relative strength of the US dollar has made our products more expensive in many parts of the world."  Europe brought in $20.4 billion in sales this quarter, while Japan brought in $6.9 billion. China accounted for $13.2 billion in sales, down from $17.96 billion a year prior. The rest of Asia Pacific accounted for $6.93 billion. Meanwhile, sales in the Americas grew slightly from $35.2 billion in Q1 2018 to $36.94 billion in Q1 2019. 

Apple's net cash balance was $130 billion at the end of the quarter. The company is targeting a net cash neutral position over time.

For Q2, Apple is expecting revenue between $55 billion and $59 billion. Analysts are expecting revenue of $58.99 billion.