Apple (NASDAQ:AAPL) would’ve grown in the “vast majority” of the markets it operates on a year-over-year basis if not for the significant 800 basis point foreign exchange headwind, CEO Tim Cook said during the company’s conference call on Thursday.
The iPhone and the Wearables, Home and Accessories business were the two segments most impacted by the foreign exchange headwinds, while the iPhone also dealt with supply constraints that lasted through most of December. Cook, noted, however, that iPhone production is now back to where Apple (AAPL) wants it to be.
The Mac segment, which generated $7.7B in revenue during the quarter, performed as expected, but faced a difficult year-over-year comparison after Apple (AAPL) launched the MacBook Pro M1 last year.
The 62-year-old Cook also said that Apple (AAPL) is not immune to the broader macroeconomic challenges the globe is facing, but the company has the same approach it always does: manage for the long-term, adapt quickly and continue to deliver with excellence.
Cook also said Apple (AAPL) now has 935M paid subscriptions, up from 900M that it disclosed last month.
The company has also surpassed more than 2B active devices as part of its installed base.
On the conference call, CFO Luca Maestri said revenue for the March quarter is expected to be “similar” to the December quarter, which would mark an acceleration. It also expects foreign exchange to be a headwind and account for negative 5 percentage points.
Services revenue is expected to grow year-over-year, though digital advertising and mobile gaming will continue to see weakness. The iPhone is expected to accelerated sequentially, while the iPad and Mac are expected to decline double digits year-over-year.
Maestri also said that gross margins are expected to be between 43.5% and 44.5%, with operating expenses between $13.7B and $13.9B.
Cupertino, California-based Apple (AAPL) earned $1.88 per share on revenue of $117.15B during the first-quarter, as the iPhone accounted for $65.78B in sales, down from $71.62B in the year-ago period.