Apple sees first quarterly sales decline since 2003

Despite another quarter of record sales and revenue, Apple Inc.’s stock traded lower after the company reported lower-than-expected iPhone sales and forecast its first year-over-year decline in sales in 13 years.

Apple reported selling a record 74.8 million iPhones in the first quarter of its fiscal 2016—more than 34,000 phones per hour over the 13-week period. Despite the record, iPhone sales fell short of consensus analysts’ expectations of about 75.5 million. It was also the lowest year-over-year growth in iPhone sales, 0.4 percent, since Apple began selling them in 2007.

Fiscal first quarter sales of iPads and Macs also came in lower than analysts’ expected. Apple said it sees sales for its fiscal second quarter, which closes in March, to be between $50 billion and $53 billion. This would represent a decline from the $58 billion in sales that Apple posted in the second quarter of fiscal 2015, the first year-over-year sales decline forecast for the company since the second quarter of fiscal 2003.

Tim Cook, Apple’s CEO, laid the blame for the lackluster quarterly forecast largely on the strong US dollar and economic malaise in certain regions, including China. Quarterly revenue would have been $5 billion higher in constant currency, Apple said, but the decline in value of currencies relative to the US dollar has made Apple products significantly more expensive than they had been in certain regions.

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