Chief Executive Tim Cook said the impact will be even worse during the current holiday sales quarter.
Supply chain problems cost Apple Inc $ 6 billion in sales during the company’s fiscal fourth quarter, which fell short of Wall Street’s expectations, and CEO Tim Cook said the impact will be even worse. during the current holiday sales quarter.
Cook told Reuters news on Thursday that the quarter ending September 25 had “greater than expected supply restrictions” as well as manufacturing disruptions related to the coronavirus pandemic in Southeast Asia. While Apple had seen “significant improvement” in late October at those Southeast Asian facilities, the chip shortage has persisted and is now affecting “most of our products,” Cook said.
“We are trying our best to get more [chips] and also everything we can do operationally to make sure we move forward as quickly as possible, ”Cook said.
Cook said the company expects year-over-year growth for its quarter ending in December. Analysts expect growth of 7.4 percent to $ 119.7 billion.
“We project very strong demand growth year over year. But we are also forecasting that we will be under demand by more than $ 6 billion, “Cook said.
Shares of the California-based company, which had risen nearly 15 percent this year, fell 5 percent in extended trading on Thursday. Falling Apple shares could make Microsoft Corp the world’s most valuable company after a rise in Microsoft shares thanks to the strength of its cloud computing business.
Apple’s results were mixed in a fiscal fourth quarter seen as a hiatus ahead of the year-end high-selling holiday.
Apple said revenue and earnings for the fiscal fourth quarter were $ 83.4 billion and $ 1.24 per share, compared with analysts’ estimates of $ 84.8 billion and $ 1.24 per share, according to data from IBES from Refinitiv.
The results were a tough end to a fiscal year of sales above expectations led by its iPhone 12 models and strong sales of Mac computers and iPads to work and learn from home during the pandemic.
Apple told investors in July that chip limitations would begin to affect its iPhone and iPad lines for the first time in the fourth quarter.
Apple released its results shortly after retailer Amazon.com forecast holiday quarter sales well below Wall Street expectations, citing in part labor shortages and global supply chain problems.
Apple fell short of expectations in two key categories. Apple said iPhone sales in the fourth quarter were $ 38.9 billion, down from estimates of $ 41.5 billion, according to Refinitiv data.
Cook said chips made with older technology remain the main supply constraint. He said Apple isn’t sure whether the shortage will ease after the holiday shopping season.
“Most of what we design is cutting edge [chip manufacturing] nodes, but all products also have some legacy node components. And so [shortage] continues in [fiscal] Q1, and we’ll see what it looks like beyond that. It’s very difficult to call, ”Cook told Reuters.
The company’s accessories segment, which contains fast-growing categories like its AirPods wireless earbuds, stood at $ 8.8 billion, $ 0.5 billion less than analyst expectations of $ 9.3 billion, according to Refinitiv data.
Other segments did better. Sales of iPads and Macs were $ 8.3 billion and $ 9.2 billion, compared to analyst estimates of $ 7.2 billion and $ 9.2 billion, according to Refinitiv data.
The company’s services segment, which contains its App Store business, had sales of $ 18.3 billion in revenue, an increase of 26 percent, compared to analysts’ expectations of $ 17.6 billion. Cook told Reuters that Apple now has 745 million paid subscribers to its platform, up from 700 million it disclosed a quarter ago.
Other positive points in the company’s results were its sales in China, which increased 83 percent to $ 14.6 billion.
The company said it returned $ 24 billion to shareholders during the quarter.