In the largest decline since 2016, Apple’s quarterly sales recorded $117 billion, down 5 percent.

Apple shares fell 5 percent after the results were announced.

The company’s sales fell five percent to $117.2 billion and declined in every part of the world during the quarter ended December 31. This is the first decline in sales year-on-year since 2019, and the largest quarterly decline since September 2016.

Sales fell from each of the company’s product categories, but rose for services and iPads. Earnings per share were $1.88, the first time Apple reported earnings below Wall Street expectations since 2016.

For his part, CEO Tim Cook said that three factors hurt Apple’s results: the strong dollar, production problems in China, and the macroeconomic environment in general.

Analysts had expected sales of $121.1 billion and earnings of $1.94 per share, according to Refinitiv data. Tim Cook, chief executive of the company, told Reuters that the production disruptions that hit Apple during the first quarter of the fiscal year had ended.

During the first quarter of the fiscal year, Apple faced a wave of challenges that prompted Wall Street to expect sales to decline. Among the main reasons for this was supply chain pressures at a production facility in Zhengzhou, China, which affected the production of the iPhone 14 Pro and Pro Max phones.

The following are the company’s most important quarterly business results on an annual basis compared to Refinitiv’s expectations:

• Earnings per share: $1.88, compared to expectations of $1.94, down 10.9 percent year-on-year.
• Revenue: $117.15 billion, compared to expectations of $121.10 billion, down 5.49 percent year-on-year.
• iPhone sales: $65.78 billion, compared to expectations of $68.29 billion, down 8.17 percent year-on-year.
• Mac sales: $7.74 billion, compared to an expected $9.63 billion, down 28.66 percent year-on-year.
• iPad sales: $9.4 billion, compared to expectations of $7.76 billion, up 29.66 percent year-on-year.
• Other product sales: $13.48 billion, compared to expectations of $15.23 billion, down 8.3 percent year-on-year.
• Services sales: $20.77 billion, compared to expectations of $20.67 billion, up 6.4 percent year-on-year.
• Gross margin: 42.96 percent, compared to expectations of 42.95 percent.

The company also expected a downward trend in revenues during the next March quarter, similar to the December quarter, suggesting the growth of the services sector, with Mac and iPad sales declining by double compared to the same period last year. Apple added that iPhone sales will decline less in the March quarter compared to the December quarter.