Posted on 10/29/2021 5:14:50 AM PDT by Red Badger
KEY POINTS:
Apple revenue fell short of Wall Street expectations in its fiscal fourth quarter on Thursday, which Apple CEO Tim Cook attributed to larger-than-expected supply constraints.
Apple’s overall revenue was still up 29% on an annual basis and each of its product categories grew on an annual basis.
Apple hasn’t provided official guidance since the start of the pandemic, but Cook said Apple expects “solid year-over-year revenue growth” in the December quarter despite the fact Apple will face worse supply constraints.
_____________________________________________________________________
Apple revenue fell short of Wall Street expectations in its fiscal fourth quarter on Thursday, which Apple CEO Tim Cook attributed to larger-than-expected supply constraints on iPhones, iPads, and Macs.
Apple fell under 3% in extended trading.
“We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” Cook told CNBC’s Josh Lipton. “The supply constraints were driven by the industry wide chip shortages that have been talked about a lot, and COVID-related manufacturing disruptions in Southeast Asia.”
However, Apple’s overall revenue was still up 29% and each of its product categories grew on an annual basis.
Here’s how Apple did versus Refinitiv consensus estimates:
EPS: $1.24 vs. $1.24 estimated
Revenue: $83.36 billion vs. $84.85 billion estimated, up 29% year-over-year
iPhone revenue: $38.87 billion vs. $41.51 billion estimated, up 47% year-over-year
Services revenue: $18.28 billion vs. $17.64 billion estimated, up 25.6% year-over-year
Other Products revenue: $8.79 billion vs. $9.33 billion estimated, up 11.5% year-over-year
Mac revenue: $9.18 billion vs. $9.23 billion estimated, up 1.6% year-over-year
iPad revenue: $8.25 billion vs. $7.23 billion estimated, up 21.4% year-over-year
Gross margin: 42.2% vs. 42.0% estimated
iPhone sales were up 47% year-over-year, but still came in under Wall Street estimates.
Apple hasn’t provided official guidance since the start of the pandemic, but Cook said Apple expects “solid year-over-year revenue growth” in the December quarter despite the fact Cook said Apple will face worse supply constraints, higher than the $6 billion hit to revenue in the September quarter. Still, Apple says that its December quarter will be the company’s largest in terms of revenue in its history.
Apple CFO Luca Maestri said in a call with analysts that iPad sales would decline year-over-year in the December quarter due to supply constraints while other product categories would grow.
“So we’ve finished about a month of the quarter. The Covid related manufacturing disruptions have improved greatly. The chip shortages linger on,” Cook said.
Cook said that the supply issues were with chips on “legacy nodes,” or older chips, instead of the technologically advanced processors at the heart of Apple’s devices.
The expectation of year-over-year sales growth suggests that Apple sees significantly more demand for its new iPhone 13 models than it can supply. Apple’s fourth quarter only included a few days of iPhone 13 sales as it ended on Sept. 25.
Apple is currently in the middle of massive growth as sales of iPhones, iPads and Macs exploded during the pandemic. Apple’s annual revenue for its fiscal 2021 was up 33% from 2020 to $366 billion.
The strongest growth in Apple product categories aside from iPhones was in its services business, which includes sales from the App Store, music and video subscription services, advertising, extended warranties, and licensing. Apple’s services grew 26% annually, which Cook said was higher than the company expected.
WATCH NOW VIDEO01:14 Dan Ives on Apple: It’s a demand-supply issue, they can’t get phones to consumers
Cook said that Apple has 745 million paid subscriptions, which not only includes first-party services like Apple Music but also subscriptions through Apple’s App Store.
“That’s up 160 million year on year, which is up five times in five years. So it’s been quite the growth cycle,” Cook said.
Apple’s Macs did not grow strongly, only increasing 1.6% annually, but the quarter did not include sales of new MacBook Pro models that were announced in October. Apple’s iPads grew 21% year-over-year, although they were supply constrained. Apple’s Other Products category, which includes Apple Watch and AirPods models, grew 11% without new products, which went on sale in October.
This quarter marks the first time since April 2016 that Apple has failed to beat earnings estimates, and it’s the first time since May 2017 that Apple’s revenues have missed estimates, according to Refinitiv data.
APPLE PING!..................
“That’s a shame...” ;)
He asked for it, as did anyone who voted for Biden.
Wow, some supply constraint!
Revenue is not profits....................
We were all going to buy new iPhones this past month, but with the privacy issues Apple is now bringing forth, we are going to see what de-Googled phones become available.
Supply chain determines units sold, ie, rev. It is remarkable they grew top line rev by a third! I didn’t look to see if number of units also increased by a third.
Has nothing to do with bad product design. The new Macbook? Getting rid of the 9V port on iPhones (who on Earth would want to charge their phone while listening to something?)
Too many XY only orgies in the executive suite? Could be.
If they were smart they would have had a reserve in stock, just in case.
If they were very smart they would have had a second source of stock, just in case.
If they were extremely smart they would have had a in house source of stock, just in case.
Apple can pay six billion for a cup of coffee.
And leave a TIP of twice that................
I’ve personally known a couple of companies that ordered two years of materials inventory, but in both cases they were going into low tech products with long product life cycles.
It isn’t so easy when you have such short product life cycles. It’s easy to get caught with excess inventory of obsolete parts.
Everybody does Doc. I was being facetious. Apologies for my horrible attempt at humor.
However, Apple’s overall revenue was still up 29% and each of its product categories grew on an annual basis.
Wow, that is a real letdown. /s
Yeah, I wish I had their problems.
Apple works with the chinese communists and uses slave labor and supports the democrat party. I hope they lose more money.
Isn’t iTunes sort of dying on the vine? I know that I no longer use it. Why buy music when you can get anything you want on Spotify’s free service if you are willing to listen to a few commercials.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.