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Apple Revenues Up Despite Shortages, Worse To Come Claim Cook

Apple, who is already restricting supply of their new products in Australia due to shortages, has reported a 29% increase in revenue for the last quarter. This was down on what analysts were expecting.

Apple CEO Tim Cook said on a conference call that the supply constraints were worse than expected last quarter and cost it about $6 billion.

The Company delivered revenues of $83.36 billion Vs $84.85 billion estimated by analysts. iPhone revenue was $38.87 billion vs. $41.51 billion estimated. This was up 47% year-over-year.

Services revenue was $18.28 billion vs. $17.64 billion estimated, up 25.6% year-over-year.

Mac revenue was $9.18 billion vs. $9.23 billion estimated. This was only up 1.6% year-over-year due to component shortages.

iPad revenue: $8.25 billion vs. $7.23 billion estimated, up 21.4% year-over-year.

And if you think iPhones where expensive, Apple is achieving a gross margin of 42.2%. This was a slight increase over the 42.0% estimated by analysts.

Apple CEO Tim Cook attributed the fall in expected revenues to larger-than-expected supply constraints on iPhones, iPads, and Macs.

Apple stock rose 2.5% . On the news at 10.00am local time it was trading at US $152.57

“We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” Cook said.

“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.”

The US company 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 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.

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.

Cook said 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 years on year, which is up five times in five years. So, it’s been quite the growth cycle,” Cook said.

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