In a quarterly report released on Thursday, Apple (AAPL) announced stronger revenue growth than expected, but revealed a slowdown in sales in China, causing its stock to drop in after-hours trading. The tech giant reported earnings per share of $2.18 on revenue of $119.6 billion, surpassing analysts' expectations of $2.11 EPS on revenue of $117.9 billion.

Apple's iPhone sales for the quarter reached $69.7 billion, slightly exceeding expectations of $68.6 billion. However, sales in China, the company's third-largest region after North America and Europe, were lower than anticipated, totaling $20.8 billion compared to Wall Street's projection of $23.5 billion. Apple attributed the decline in Chinese sales to a combination of a sluggish economy and competition from rival Huawei.

Despite the challenges in China, Apple highlighted positive growth in other areas of its business. CEO Tim Cook announced a record-high installed base of active devices, surpassing 2.2 billion across all products and geographic segments. Mac revenue reached $7.8 billion, just missing analysts' expectations of $7.9 billion. Additionally, iPad revenue fell to $7 billion, a significant drop from the $9.4 billion generated the previous year.

Investors reacted to the mixed results, causing Apple's stock to decline by 1.5% in after-hours trading. Concerns over slowing sales growth in China weighed on shares ahead of the company's earnings call. This contrasted with the positive performance of other tech giants, such as Meta Platforms and Amazon, which saw their stocks soar after reporting strong earnings.

The earnings report from Apple is part of a busy week for the financial world, with the focus remaining on the Federal Reserve's rate cuts and the release of mega-cap tech earnings. As investors recalibrate their expectations for the central bank's rate plans, the market awaits the nonfarm payrolls report on Friday, which will provide insight into the January job market.

Overall, Apple's performance in terms of revenue growth exceeded expectations, but concerns over sales in China continue to weigh on investor sentiment. The tech giant's next steps will be closely watched as it navigates the challenges in one of its key markets while capitalizing on growth opportunities in other regions.