Shares of Apple Fall as Company Warns of Possible $8B Hit from Supply Constraints

While Apple reported this week that revenue grew nearly 9% year over year during the quarter ended in March, shares fell nearly 4% in extended trading after Apple CFO Luca Maestri warned of challenges in the current quarter.

This includes supply constraints that could hurt sales by up to $8 billion.
The company also warned that demand in China was being sapped by Covid-related lockdowns. CEO Tim Cook added the company was “not immune” to supply chain challenges.

Apple said its revenue grew nearly 9% year over year in the quarter ended in March on Thursday.

For the second quarter, Apple reported earnings per share of $1.52, compared to $1.43 expected, per Refintiv.

Revenue at $97.28 billion was better than the $93.89 billion expected. It was also an increase of 8.59% YOY. iPhone revenue in particular came in at $50.57 billion, compared to $47.88 billion estimated. A jump of 5.5% YOY.

Cook said that the iPhone business had a successful quarter with sales to so-called switchers, or people who previously had an Android phone but decided to buy an iPhone.

“We had a record level of upgraders during the quarter and we grew switchers, strong double digits,” Cook told CNBC’s Steve Kovach.

Apple did not provide a forecast for the current quarter. They have not provided official revenue guidance since February 2020, citing uncertainty tied to the pandemic.

The company additionally that its board of directors authorized $90 billion in share buybacks, maintaining its pace as the public company that spends the most buying its own shares.

It spent $88.3 billion on buybacks in 2021, according to S&P Dow Jones Indices.

Apple also increased its dividend by 5% to 23 cents per share.

“This was a Tom Brady-like quarter for Apple,” said Wedbush Securities Dan Ives.

Cook said that Apple’s financial performance was “better than we anticipated.” The fastest-growing region was the Americas, which saw sales rise 20% during the quarter to $50.57 billion.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.