Apple reported earnings on Tuesday and the biggest story is what CEO Tim Cook had to say about the global economy.
On Tuesday afternoon Apple reported revenue that missed expectations and guided to an 11% year-on-year sales decline in the current quarter.
But given Apple’s global footprint, it was Cook’s extensive commentary on the conference call about just how hard things have been for the company in the current economic environment that turned heads.
“Our results are particularly impressive, given the challenging global macroeconomic environment,” Cook said. “We’re seeing extreme conditions unlike anything we’ve experienced before just about everywhere we look.”
Cook added (emphasis ours):
Major markets, including Brazil, Russia, Japan, Canada, Southeast Asia, Australia, Turkey and the eurozone, have been impacted by slowing economic growth, falling commodity prices and weakening currencies.
Since the end of fiscal 2014, for instance, the euro and British pound are down double-digits, and major currencies such as the Canadian dollar, Australian dollar, Mexican peso, and Turkish lira have declined 20% or more. The Brazilian real is down more than 40% and the Russian ruble has declined more than 50%.
66% of Apple’s revenue is now generated outside the United States, so foreign currency fluctuations have a very meaningful impact on our results […]
We know the conditions in China have been a source of concern for many investors. Last summer, while many companies were experiencing weakness in their China-based results, we were seeing just the opposite, with incredible momentum for iPhone, Mac and the App Store, in particular […]
Notwithstanding these record results, we began to see some signs of economic softness in Greater China earlier this month, most notably in Hong Kong. Beyond the short-term volatility, we remain very confident about the long-term potential of the China market and the large opportunities ahead of us and we are maintaining our investment plans.
Later in the call, Cook said the company planned to maintain its investments in economies like Russia and Brazil where the crash in oil and other commodity prices had really taken a toll.
Following the company’s report almost every Wall Street analyst followed by Business Insider maintained a bullish stance on the company.