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Why is Apple (AAPL) Stock Falling 3% Today?

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On Wednesday, shares of iPhone maker Apple Inc. (AAPL - Free Report) are falling, down around 3% in mid-morning trading—it dropped as much as 3.7% earlier—as the effects of its fourth quarter earnings results continue to linger.

Apple reported earnings per share of $1.67, surpassing the Zacks Consensus Estimate of $1.66 per share. Revenues also beat expectations, coming in at $46.852 billion. However, both the top and bottom line fell significantly from the prior year’s numbers, down 9.9% and 15%, respectively. This marks the third consecutive quarter in which both income and revenue were down year-over-year.

iPhone unit sales also dropped year-over-year, down 5% to roughly $45.5 million; revenues from the iPhone declined 13% from the year-ago quarter to $28.2 billion, which makes up 60% of Apple’s total revenue. Mac sales dropped 17% year-over-year, while iPad sales were stable. Like before, Apple did not break out sales for its Apple Watch.

Despite these year-over-year declines, Apple’s Services segment—which includes software and services like Apple Music, Apple Pay, and iCloud—was a bright spot in its earnings results, bringing in $6.3 billion in revenue, up 24%.

Like all retailers, the current quarter, which includes the holiday season, will be very important for Apple. The tech giant forecasts revenues in the range of $76 billion to $78 billion. It has released many new products recently, like the iPhone 7 and iPhone 7 Plus, as well as the Apple Watch Series 2 and wireless earbuds called AirPods; the company is also set to unveil new Macs in the coming days. These items will surely help Apple reach its sales goal, as they will likely be at the top of consumers’ holiday wish lists.

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