Apple posts rare sales miss amid chip shortage, supply issues

Apple Inc. (AAPL) Report posted weaker-than-expected fourth quarter sales Thursday, and profits that only matched Street forecasts, as the global chip shortage hit iPhone sales for the world's most valuable tech company.

Apple said profits for the three months ending in September, the tech giant's fiscal fourth quarter, were pegged at $1.24 per share, up 70% from the same period last year and bang in line with the Street consensus forecast. Group revenues, Apple said, rose 29% from last year to $83.4 billion, just shy of analysts' estimates of an $84.8 billion tally.

Apple said iPhone revenues rose 47% from last year to $38.9 billion, well below the $41.5 billion Street forecast.

Greater China revenues, Apple said, rose 83% from last year's pandemic hit period to $14.56 billion, while overall services revenues rose 26.6% to $18.28 billion as the company's installed base of devices topped 1.65 billion.

“This year we launched our most powerful products ever, from M1-powered Macs to an iPhone 13 lineup that is setting a new standard for performance and empowering our customers to create and connect in new ways,” said CEO Tim Cook. “We are infusing our values into everything we make — moving closer to our 2030 goal of being carbon neutral up and down our supply chain and across the lifecycle of our products, and ever advancing our mission to build a more equitable future.”

Apple shares were marked 3.1% lower in extended-hours trading immediately following the earnings release to indicate a Friday opening bell price of $147.85 each.

Apple's holiday quarter sales will also be hit by the chip shortage, Cook said, telling Reuters that “we're doing everything we can do to get more (chips) and also everything we can do operationally to make sure we're moving just as fast as possible.”

Still, CFO Luca Maestri told investors on a conference call that December quarter sales would be “very solid”, and likely hit a record high, with gross margins in the region of 41.5% to 42.5%.

Samsung Electronics, the world's biggest chipmaker and handset rival to Apple, said Thursday that while there is “much uncertainty due to various macro issues including the effect of 'back-to-normal', component supply and raw material price hikes ... component supply issues seem to stem more from mismatches in supply chain management rather than from an absolute lack of supply” and suggested the situation could improve by the second half of next year.

Earlier this month, however, Bloomberg News reported that Apple could slash production by as much as 10 million units , taking the overall end-of-year total to around 80 million units, as a result of delays from major supplies such as Broadcom (AVGO) and Texas Instruments (TXN).

Apple launched its new iPhone 13 last month with a base price of $799, while unveiling higher-priced versions including the iPhone 13 Pro and iPhone 13 Max,

Credit Suisse noted earlier this week that wait times for the new handsets “remain extended across the board” and include the longest gap between order and delivery for at least four years.

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