Apple Stock Tumbles After a Rare Sales Miss. Investors Aren’t Happy.
Apple sold $38.9 billion worth of iPhones in its latest quarter—more than $2 billion less than what Wall Street analysts expected.
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reported disappointing financial results for its fiscal fourth quarter ended September 30, as sales of iPhones failed to match Wall Street estimates. The stock is losing ground in late trading Thursday.
For the quarter, Apple (ticker: AAPL) posted revenue of $83.4 billion, up 29% from the year ago quarter, and shy of the Street consensus at $84.9 billion. Profits were $1.24 a share, in line with estimates.
The company had warned one quarter earlier that component shortage could affect some product categories in the quarter, and that may have played a factor in results.
Sales of iPhones were $38.9 billion, up 47% from a year ago, but shy of the Wall Street consensus at $41.2 billion. And iPad sales were up 21% to $8.3 billion but still below the consensus of $8.8 billion. Mac sales in the quarter were $9.2 billion, up 2%, and just above the Street’s $9.1 billion. Wearable revenues also came in light, at $8.8 billion, below the Street at $9.4 billion. Overall product revenues were $65.1 billion, up 29.8%.
Services revenue was a bright spot, at $18.3 billion, up 26% from a year ago, and ahead of the consensus at $17.7 billion.
Apple CEO Tim Cook said on a conference call with analysts that the company saw larger-than-expected supply constraints in the quarter, reducing revenue by an estimated $6 billion. He said the company dealt with shortages of chips as well as Covid-related manufacturing disruptions.
Meanwhile, CFO Luca Maestri said on the call that Apple expects the revenue impact from supply constraints in the December to be larger than it was in the September quarter. Cook added that sales in the latest quarter affected the iPhone, iPad and the Mac. For this quarter, he thinks the largest issue will be chip shortage, with manufacturing issues in Southeast Asia easing.
In response to a question on the call, Cook said he’s not comfortable in making a prediction on when the chip supply issues would ease.
Maestri also said that the company expects “very solid” year over year growth in the December quarter, with growth in all areas except iPad, due to supply constraints. Services revenue growth is expected to decelerate from the most recent level.
Maestri added that Apple bought back $20 billion of stock in the latest quarter, and ended the fiscal year with $66 billion in net cash, with $191 billion in cash and securities partially offset by $125 billion in debt.
By geography, revenues were up 20% in the Americas, 23% in Europe, 83% in Greater China, 19% in Japan and 26% in the rest of Asia Pacific.
For the full fiscal year, the company had revenue of $365.8 billion, up 33.3%, with profits of $5.61 a share, up from $3.28 a year ago.
Apple shares are down 3.1% in late trading, to $147.85.
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