Apple Inc's supply chain troubles cost the firm $6 billion in sales in the fiscal fourth quarter, missing Wall Street projections, and CEO Tim Cook predicted the impact will be considerably worse during the current Christmas sales season.
On Thursday, Cook said that the quarter ended September 25 experienced "greater than expected supply restrictions" as well as production difficulties in Southeast Asia due to the epidemic.
While Apple's Southeast Asian factories had experienced "substantial improvement" by late October, the chip shortfall has persisted and is now hurting "most of our devices," according to Cook.
"We're doing everything we can do to get more (chips) and also everything we can do operationally to make sure we're moving just as fast as possible," Cook said.
The company expects year-over-growth for its quarter ending in December, Cook said. Analysts expect growth of 7.4% to $119.7 billion.
"We're projecting very solid demand growth year over year. But we are also predicting that we're going to be short of demand by larger than $6 billion," Cook said.
In a fiscal fourth quarter that was considered as a lull before the high-sales holiday end of the year, Apple's performance was mixed.
According to IBES statistics from Refinitiv, Apple's revenues and earnings for the fiscal fourth quarter were $83.4 billion and $1.24 per share, respectively, compared to analyst projections of $84.8 billion and $1.24 per share.
During the COVID-19 pandemic, the results were a rough finish to a fiscal year marked by above-expectations sales powered by its iPhone 12 models and high sales of Mac computers and iPads for working and studying from home.
In July, Apple warned investors that processor shortages will begin to affect its iPhone and iPad lines in the fourth quarter.
Apple released its earnings just after online giant Amazon.com estimated holiday-quarter sales that were considerably below Wall Street projections, citing labor shortages and global supply chain concerns as reasons. find out more
Apple has "managed to navigate the problems fairly well, but hasn't escaped unscathed," according to Sophie Lund-Yates, the equity analyst at Hargreaves Lansdown. "An extended duration of these problems will spell trouble, especially because the market is unforgiving when it comes to Apple's performance," she added.
In two major categories, Apple fell short of expectations.
According to Refinitiv statistics, Apple's fourth-quarter iPhone sales were $38.9 billion, below predictions of $41.5 billion.
The current key supply constraint is the chips made with older technology, Cook said. It is yet unclear whether the shortages will ease after the holiday shopping season, he said.
"It's very difficult to call," Cook said.
The company's accessories category, which includes fast-growing areas like its AirPods wireless headphones, came in at $8.8 billion, half a billion lower than analyst projections of $9.3 billion, according to Refinitiv data,
Other parts of the show performed well. According to Refinitiv statistics, iPad and Mac sales were $8.3 billion and $9.2 billion, respectively, compared to analyst projections of $7.2 billion and $9.2 billion.
The company's services sector, which includes its App Store business, earned revenue of $18.3 billion, up 26 per cent from $17.6 billion expected by analysts. Cook told Reuters that Apple's platform now has 745 million paying members, up from 700 million last year.
"Services were strong, and it shows the beauty and durability of software and services, as there are better margins and no supply issues since the software doesn't arrive on a container ship," said Hal Eddins, chief economist at Apple shareholder Capital Investment Companies.
(Source:www.businessworld.in)
On Thursday, Cook said that the quarter ended September 25 experienced "greater than expected supply restrictions" as well as production difficulties in Southeast Asia due to the epidemic.
While Apple's Southeast Asian factories had experienced "substantial improvement" by late October, the chip shortfall has persisted and is now hurting "most of our devices," according to Cook.
"We're doing everything we can do to get more (chips) and also everything we can do operationally to make sure we're moving just as fast as possible," Cook said.
The company expects year-over-growth for its quarter ending in December, Cook said. Analysts expect growth of 7.4% to $119.7 billion.
"We're projecting very solid demand growth year over year. But we are also predicting that we're going to be short of demand by larger than $6 billion," Cook said.
In a fiscal fourth quarter that was considered as a lull before the high-sales holiday end of the year, Apple's performance was mixed.
According to IBES statistics from Refinitiv, Apple's revenues and earnings for the fiscal fourth quarter were $83.4 billion and $1.24 per share, respectively, compared to analyst projections of $84.8 billion and $1.24 per share.
During the COVID-19 pandemic, the results were a rough finish to a fiscal year marked by above-expectations sales powered by its iPhone 12 models and high sales of Mac computers and iPads for working and studying from home.
In July, Apple warned investors that processor shortages will begin to affect its iPhone and iPad lines in the fourth quarter.
Apple released its earnings just after online giant Amazon.com estimated holiday-quarter sales that were considerably below Wall Street projections, citing labor shortages and global supply chain concerns as reasons. find out more
Apple has "managed to navigate the problems fairly well, but hasn't escaped unscathed," according to Sophie Lund-Yates, the equity analyst at Hargreaves Lansdown. "An extended duration of these problems will spell trouble, especially because the market is unforgiving when it comes to Apple's performance," she added.
In two major categories, Apple fell short of expectations.
According to Refinitiv statistics, Apple's fourth-quarter iPhone sales were $38.9 billion, below predictions of $41.5 billion.
The current key supply constraint is the chips made with older technology, Cook said. It is yet unclear whether the shortages will ease after the holiday shopping season, he said.
"It's very difficult to call," Cook said.
The company's accessories category, which includes fast-growing areas like its AirPods wireless headphones, came in at $8.8 billion, half a billion lower than analyst projections of $9.3 billion, according to Refinitiv data,
Other parts of the show performed well. According to Refinitiv statistics, iPad and Mac sales were $8.3 billion and $9.2 billion, respectively, compared to analyst projections of $7.2 billion and $9.2 billion.
The company's services sector, which includes its App Store business, earned revenue of $18.3 billion, up 26 per cent from $17.6 billion expected by analysts. Cook told Reuters that Apple's platform now has 745 million paying members, up from 700 million last year.
"Services were strong, and it shows the beauty and durability of software and services, as there are better margins and no supply issues since the software doesn't arrive on a container ship," said Hal Eddins, chief economist at Apple shareholder Capital Investment Companies.
(Source:www.businessworld.in)
Homepage
Send to a friend
Printable version
Share
