Market Commentary

Apple’s Market Cap Falls Below $3T Again on Soft Earnings

Raza Akram
6 Feb 2024 · 1 minute read

Apple (AAPL:US) shares opened lower on Friday after the tech titan reported a bit softer-than-expected results for its third fiscal quarter, as well as giving a conservative outlook for the current quarter.

Apple’s FQ3 performance was impacted by weak demand for hardware products, including the company’s flagship iPhone lineup. Revenue fell 1.4% year-over-year to $81.8 billion, just ahead of the expected $81.6 billion.

Adjusted EPS topped analyst expectations by $0.06 with Apple’s gross margin rising 1.5% to $36.4 billion

“Our June quarter year-over-year business performance improved from the March quarter, and our installed base of active devices reached an all-time high in every geographic segment,” said Luca Maestri, Apple’s CFO. 

Segment-wise, Apple’s hardware sales fell 4.4%, somewhere in line with expectations. However, iPhone sales were down 2.4% YoY, marking a bigger-than-expected decline. iPad sales suffered the biggest hit with revenue in this unit falling 20% YoY to $5.8 billion, a big miss compared to the expected $6.3 billion. 

A positive was the Services business, which grew 8.2% YoY to $21.2 billion

CFO Maestri said on the earnings call that the management expects a similar performance in FQ4 relative to FQ3. However, Apple sees iPhone sales bouncing in FQ4 while the Services business is expected to continue growing.

Ro Khanna, Josh Gottheimer, John Boozman, and Nancy Pelosi are some Congress members who traded Apple stock in recent weeks and months. Congresswoman Pelosi and her husband Paul exercised 50 call options to acquire 5,000 AAPL shares at a strike price of $80 in June.