Supply chain problems cost Apple $ 6 billion (approximately Rs 44,890 billion) in revenue in the fourth quarter of its fiscal year, which fell short of Wall Street’s expectations.
Cook told Reuters on Thursday that the September 25th quarter had “bigger supply bottlenecks than expected” as well as pandemic-related production disruptions in Southeast Asia. While Apple had seen “significant improvement” in these Southeast Asian facilities through late October, the chip shortage persists and now affects “most of our products,” Cook said.
“We’re doing everything we can to get more (chips) and also everything we can operationally to make sure we move forward as quickly as possible,” said Cook.
Cook said the company expects year-over-year growth for the quarter ending December. Analysts expect a growth of 7.4 percent to 119.7 billion US dollars (approx. 8.95.413 billion rupees).
“We forecast very solid year-on-year demand growth. We also predict that demand will be more than $ 6 billion below that,” said Cook.
The shares of the Cupertino, California-based company, which rose nearly 15 percent this year, fell 3.4 percent on Thursday in expanded trading. The slump could make Microsoft the most valuable company in the world after Microsoft stocks soared on its cloud computing business.
Apple’s results were mixed for a fourth quarter of fiscal year that was seen as a lull ahead of the busy holiday end of the year.
Apple said its fiscal fourth quarter revenue and earnings were $ 83.4 billion (about Rs. 6.23.739 billion) and $ 1.24 (about Rs. 92) per share, respectively, compared to analyst estimates of $ 84.8 billion (about Rs.6.34.241 billion) and $ 1.24 per share, according to IBES data from Refinitiv.
The results were a rocky end to a fiscal year of above-expected sales, led by the iPhone 12 models and strong sales of Mac computers and iPads for working and studying from home during the COVID-19 pandemic.
Apple announced to investors in July that chip restrictions would hit its iPhone and iPad lines for the first time in the fourth quarter.
Apple released its results shortly after retailer Amazon forecast sales for the Christmas quarter well below Wall Street’s expectations, citing in part to labor shortages and global supply chain issues.
Apple “managed to handle the problems pretty well but did not get away with it unscathed, and prolonged duration of these problems will mean trouble, especially because the market is unforgiving about Apple’s performance,” said Sophie Lund-Yates. Equity Analyst at Hargreaves Lansdown.
Apple fell short of expectations in two major categories.
Apple said fourth-quarter iPhone sales were $ 38.9 billion (approx.
Cook said chips made with older technology continue to be the main restriction on supply. He said Apple isn’t sure yet whether the bottlenecks will ease after the Christmas shopping season.
“It’s very difficult to call,” Cook told Reuters.
The company’s accessories segment, which includes fast-growing categories like its AirPods wireless headphones, was $ 8.8 billion (about Rs.65.837 billion), half a billion dollars less than analysts’ expectations of $ 9.3 billion (roughly 69,575 billion rupees). to refinitive data.
Other segments did better. Sales for iPads and Macs were $ 8.3 billion (approximately Rs.65,823 billion) and $ 9.2 billion (approximately Rs.68,815 billion), compared to analyst estimates of $ 7.2 billion (approximately 53,855 billion rupees) and $ 9.2 billion, according to Refinitive data.
The company’s services segment – which includes its App Store business – had sales of Rs.18.3 billion (approximately Rs.136,897 billion), up 26 percent compared to analyst expectations of $ 17.6 billion (approximately $ 17.6 billion) 1.31.661 billion rupees). Cook told Reuters that Apple now has 745 million paying subscribers to its platform, up from 700 million it announced a quarter ago.
“The services have been strong and show the beauty and persistence of software and services as there are better margins and no delivery issues because software doesn’t arrive on a container ship,” said Hal Eddins, chief economist at Apple shareholder Capital Investment Company.
© Thomson Reuters 2021