Apple reported solid quarterly results despite supply shortages but cautioned that its growth slowdown is likely to worsen. The company said it’s still laboring to get enough chips to meet demand and engaging with COVID-related shutdowns at factories in China that assemble iPhones and other products.
Although initial outcomes for the January-March topped analysts’ projections, the good news was fast eclipsed when management alerted of trouble ahead during a conference call.
The supply issues will embrace Apple’s sales much harder in the current April-June quarter than in its previous one. As a result, the company estimated it would take a hit to revenue of $4 billion to $8 billion.
Apple’s stock price slipped 4% in extended trading, reversing a positive response after the original Apple report. Before the sobering forecast reduced the shares even further, Apple’s stock had dropped 10% from its apex in early January.
“It looks like it’s two steps forward, one step back. It was a solid quarter, but it looks like COVID has reared its ugly head,” stated Edward Jones reviewer Logan Park.
Like a broad gamut of companies varying from automakers to health care providers, Apple has been grappling with deficiencies in computer chips and other key technology components needed in modern products.
Apple reported better-than-expected profits Thursday on robust customer demand for its devices and services even as revenue growth slowed while it navigated an ongoing semiconductor supply crunch.
Apple had hoped the crunch to relax as this year progressed, but recent COVIDs outbreaks are beginning to curtail production in Chinese plants that the company depends on.
Despite those headwinds, the consequences for the January-March period pulled a picture of a still-expanding empire, provoking massive profits that have generated the firm a $2.7 trillion market value – the largest among U.S. businesses.
Apple announced a 5% growth in its quarterly dividend, steadily increasing since the league revived the expense a decade ago. Effective May 12, Apple’s latest quarterly dividend will stand at 23 cents per share – additionally than duplicated from 10 years ago.
Even without that supply concerns, Apple would still meet the same challenges confronting many other major technology businesses. After enjoying a pandemic-driven boom, it’s evolving tougher to produce the same levels of spectacular growth that drove tech-company stock costs to record highs. Nevertheless, the crisis persists in fading away, and development has become harder to maintain yearly.
Apple’s current quarter illustrated the high burdens the Cupertino, California, business is now trying to vacate. Revenue for the period tallied $97.3 billion, yet it was only 9% more elevated than last year. Moreover, it kept the first time Apple hadn’t produced double-digit gains in year-over-year revenue in the past six quarters. That number, however, surpassed the average revenue estimate of $94 billion among analysts interviewed by FactSet Research, suggesting that Apple’s growth slowdown hasn’t been quite as extreme as investors were foreseeing.
Quarterly profit arrived at $25 billion, or $1.52 per share, a 6% increase from last year. Analysts held expected earnings per share of $1.42.The iPhone stays Apple’s marquee product, with sales of $50.6 billion in the past quarter – a 5% uptick from last year. Apple has been trying to hold its iPhone sales growing while chips stay in short supply by siphoning some features from the iPad, which saw its deals fall 2% from last year to $7.6 billion.