Apple’s stock took a hit on Thursday afternoon after the world’s richest tech company announced underwhelming iPhone sales when it reported its fourth-quarter earnings.
Apple reported earnings of $2.91 per share and revenue of $62.9 billion — surpassing analyst estimates of $61.57 billion in sales and earnings of $2.78 per share.
But iPhone sales came in slightly below expectations, with the company selling 46.9 million units of its trademark device. Wall Street projected Apple would sell 47.5 million during the quarter. Apple did make more money, though, off its iPhone sales, with iPhone revenue increasing 29 percent to $37.2 billion behind a higher average selling price. The iPhone average selling price was $793 for the quarter — coming in 28 percent higher than the same time last year. The company unveiled three new iPhone models last month, including the iPhone XS Max, which costs $1,099 for its base model.
Apple shares dropped about 3.5 percent in after-hours trading to $214.20 per share.
“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” Apple chief Tim Cook said in a statement accompanying earnings.
Wall Street may also be reacting to the company slightly missing estimates on Services revenue. The sector, which includes App Store sales and Apple Music subscribers, pulled in $9.98 billion in sales, a 17 percent year-over-year increase. Apple’s guidance for next quarter didn’t seem to wow investors, either, even though its revenue forecast of $89 billion to $93 billion fit within analyst estimates.
Apple’s massive cash hoard decreased $6 billion during the quarter, hitting $237.1 billion, as the company continues to invest in content. The company also pledged to spend billions of dollars on adding more U.S. jobs earlier this year.
The company will hold its earnings call at 5:00 p.m. ET.