Apple’s stock price fell 4% in extended trading, reversing a positive response after the Apple report initially came out
Apple on Thursday reported strong quarterly results despite supply shortages, but warned that its growth slowdown is likely to deepen.
The company said it’s still struggling to get enough chips to meet demand and contending with COVID-related shutdowns at factories in China that make iPhones and other products.
Although initial results for the January-March period topped analysts’ projections, the good news was quickly eclipsed when management warned of trouble ahead during a conference call.
Apple’s sales will be squeezed by the supply problems much harder in the current April-June quarter than in its previous one. The company estimated it would take a hit to revenue of $4 billion to $8 billion as a result.
It will affect most of the product categories, Apple CEO Tim Cook told analysts.
Apple’s stock price fell 4% in extended trading, reversing a positive response after the Apple report initially came out. Before the sobering forecast lowered the shares even further, Apple’s stock had fallen 10% from its peak in early January.
It was a solid quarter, but it looks like COVID has reared its ugly head, said Edward Jones analyst Logan Purk. It looks like it’s two steps forward, one step back.
Like a wide gamut of companies ranging from automakers to health care providers, Apple has been grappling with shortages of computer chips and other key technology components required in modern products.
Apple had expected the crunch to ease as this year progressed, but recent COVID outbreaks are starting to curtail production in Chinese factories that the company relies on.
Despite those headwinds, the results for the January-March period drew a picture of a still-expanding empire generating massive profits that have yielded the firm a $2.7 trillion market value — the largest among U.S. companies.