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Apple Sales Up Stock Falls 6.2% Some Category Weakness

Apple’s Wearables, Home and Accessories category, which includes the Apple Watch, Apple TV, HomePod mini and AirPods, have missed estimates with Apple warning that supply constraints would cost the company US$4 billion to $8 billion in the current quarter, their shares slipped over 6% on the news.

The wearable business generated $8.8 billion last quarter, compared with an estimate of $9 billion while overall sales rose 8.6% to $97.3 billion, which was a record for a non-holiday quarter.

In the three months to March, Apple generated $50.6 billion from the iPhone, its biggest source of revenue. That compared with an average estimate of $49.2 billion.

The company launched the low-cost iPhone SE in March, which contributed to sales in the last quarter.

The bad news is that their flagship iPhone 13 may have been less of a draw than the previous year’s iPhone 12, which was more of a dramatic update.

The iPhone 13 retained the earlier model’s design, with some minor upgrades that focused on camera improvements.

In the PC market the Apple Mac continued its resurgence, generating revenue of $10.4 billion in the quarter.

Helping was the launch of a high-powered Mac Studio desktop in the quarter, but many orders of that machine have been delayed due to supply chain shortages, customization time and high demand. The strong Mac sales are likely primarily due to the new MacBook Pros, though those models are now facing supply constraints as well claims Bloomberg.

The iPad brought in $7.65 billion, down 2.1% from the year-ago quarter. Despite new models — including an updated low-end iPad, a new iPad mini and updated iPad Air — the product continues to be one of Apple’s least-lucrative major segments. Some users have panned the device in recent months, saying its software features haven’t kept paced with hardware capabilities.

Apple claims that in the next quarter, Covid restrictions, which have swept China in recent weeks, will take a toll on the June quarter.

Back in In January, CEO Tim Cook said that Apple expected the effects of supply-chain challenges to improve in the March period compared with the final three months of 2021, when Apple estimated it lost out on more than $6 billion in sales because of inventory constraints however this has not happened with more supplier pain set to hit the US business.

The company said on a conference call overnight that last quarter’s sales and profit had topped analysts’ estimates, fuelled by strong demand for the iPhone and digital services, and the company announced $90 billion in new stock buybacks.

Following its usual pattern, Apple used its second-quarter report to increase its dividend and boost stock repurchases. The dividend will grow 5% to 23 cents a share.

Before Apple’s results were released Thursday afternoon, the stock had fallen about 7.8% this year, hurt by a broader tech downturn.

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