Apple earnings reflect falling iPhone sales

Apple said Tuesday that profit in its most recent quarter was flat compared with a year earlier because of an economic slowdown in China and diminishing demand for new iPhones.

The disappointing financial performance had been expected since Jan. 2, when Apple, for the first time in 16 years, revised its forecast for the quarter. But the announcement Tuesday indicates a difficult road ahead for Apple, which just five months ago became the first company to be valued above $1 trillion.

After years of expansion and record-setting profits, Apple appears to be entering a period of vulnerability.