Apple reports first annual revenue slide since 2001

Last Updated Oct 26, 2016 11:43 AM EDT

SAN FRANCISCO - Apple (AAPL) reported its first annual revenue decline in 15 years — since 2001, back when it introduced to the world a little music product called the iPod — as slowing sales of its signature iPhone chewed into the company’s bottom line over the past 12 months.

The company said Tuesday it sold 45.5 million iPhones in its fiscal fourth quarter, or 5 percent fewer than it had sold in the year-earlier period. Yet Apple offered a surprisingly rosy forecast for the holidays — better than what Wall Street had been expecting, at least — and the tech giant predicted a return to both revenue and profit growth this quarter from the strong sales it expects for its new iPhone7 during the holidays.

Apple reported Tuesday that its revenue declined 9 percent to $46.85 billion for the quarter that ended last month. Profit fell 19 percent to $9 billion, or $1.67 per share. That barely beat the Wall Street consensus. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.66 per share.

The company’s revenue also slightly exceeded the Street forecast of $46.83 billion.

Total revenue for the fiscal year just ended was $217 billion, down 9% from the record $233.7 billion Apple generated in fiscal 2015.

The results are a reflection of lukewarm interest in last year’s iPhone models. Apple released two new models, the iPhone 7 and 7 Plus, just two weeks before the quarter ended.

Apple is forecasting a return to sales growth in the three months ending December, after three quarterly declines. Analysts say that’s a good indicator for 2017. The holiday quarter is traditionally Apple’s biggest.

Apple shares have climbed 12 percent since the beginning of the year, while the S&P 500 index has risen roughly 5 percent. In the final minutes of trading on Tuesday, shares hit $118.25, a climb of roughly 3 percent in the last 12 months. 

By around 5:15 p.m. Eastern in after hours trading, the shares slid 2.5 percent to $115.30.