Apple on Wednesday reported sales and profits ahead of Wall Street expectations, boosted by upgrades to the iPhone 5G, but warned that the global shortage of chips could lead to sales of iPad and Mac by several billion dollars.
China’s second-quarter fiscal sales nearly doubled and the results exceeded analysts’ targets in each category, driven by $ 6.5 billion (approximately 48,270 kroner) more in iPhone sales as planned and Mac sales about a third higher than expected.
CEO of Apple Tim Cook said in an investor call that Apple avoided chip shortages in the second fiscal quarter by burning supply buffers.
In the fiscal third quarter, the deficit could cost the company $ 3 billion (approximately 22,270 kroner) to $ 4 billion (approximately 29,700 kroner) in revenue, said CFO Luca Maestri.
The shortcomings “mainly affect the iPad and Mac,” Cook said. “We will have some challenges there,” Cook said, adding later that there could be problems with sourcing semiconductors made with older chipmaking technologies. These are the same class of older tech chips hampering Ford Motor, which said Wednesday that shortages halved production in the second quarter.
Cook said Apple was competing with other industries for chip production capacity in these older factories, and “it’s very, very difficult” to predict when the shortage will end, he said.
Maestri said he expects revenue for the quarter ending in June to grow by “strong double digits” for the year, but steeper than the usual decline in revenue between the second and third quarters of the fiscal year due to later iPhone 12 startup.
Apple thrived during the coronavirus pandemic as home users stocked up on electronic devices and signed up for paid fitness and music apps and services, and sales rose even more when Apple released 5G iPhone models last fall.
For the second fiscal quarter ended March 27, Apple said sales and earnings were $ 89.6 billion (approximately 6.65,230 kroner) and $ 1.40 (approximately 100 rupees) per share, compared to forecasts from $ 77.4 billion (approximately Rs 5,74,650) and 99 cents (approximately Rs. 70) per share, according to Refinitiv.
IPhones have been the biggest driver of growth, suggesting consumers are upgrading to 5G, said Harris Anwar, a senior analyst at Investing.com.
“Incentive checks and the successful introduction of vaccines certainly help increase consumer demand for technical devices,” Anwar said.
While Apple’s business is booming, its App Store, one of the fastest – growing businesses, has come under increased antitrust control due to Apple ‘s in – app payment policies and application review policies.
Additional, Facebook warned on Wednesday that its growth could “significantly” slow later this year, as Apple’s new privacy policies will make it harder to target ads.
In the second quarter, Mac and iPad devices – two product categories on which Wall Street rarely relied on supply growth – both benefited from home-based users and distance learning. In addition to these trends, Cook said Apple customers are responding strongly to the company’s M1 chip, Mac’s first internal processor.
“Both things happening at the same time have really outperformed Mac sales. The last three quarters of the Mac have been the strongest three-quarters in Mac history,” Cook told Reuters.
Apple increased its dividend by 7 percent to 22 cents (approximately Rs. 15) per share.
Apple said iPhone sales were $ 47.9 billion (approximately 3.55,510 kroner) compared to analysts’ estimates of $ 41.4 billion (approximately 3,077,270 kroner), according to FactSet.
Sales of Mac devices and iPad gadgets are $ 9.1 billion (approximately 67,530 kroner) and $ 7.8 billion (approximately 57,880 kroner), respectively, compared to FactSet’s estimates of $ 6.8 billion (approximately 50,460 crores) and $ 5.6 billion (approximately Rs. 41,550 crores).
Apple investors are looking for growth in the Apple accessories business, which includes products such as AirPods headphones and his new AirTag trackers and the services business, which includes its App Store and new offerings such as paid podcasts. Sales in the segments were $ 7.8 billion (approximately 57,850 kroner) and $ 16.9 billion (approximately 1.25,330 kroner), respectively, against estimates of $ 7.4 billion (approximately 54,890 kroner) and $ 15.5 billion. billion dollars (approximately Rs 1, 14 970 crore).
Cook said the company has 660 million subscribers paying on its platform, an increase of 620 million in the first quarter.
Apple’s sales in the greater region of China in the second fiscal quarter, which included the busy lunar New Year season, increased by 87.5% to 17.7 billion dollars (approximately 1.31,270 kroner), compared with 57% growth in the previous quarter.
Shares of Apple have risen about 93% in the past year, compared to 61% growth for the Nasdaq 100 index, of which Apple is a component.
© Thomson Reuters 2021