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Shares of Apple Inc fell 2.9% late in Tuesday, after warning that sales growth could slow and supplies would tighten, dampening investor appetite after a record third quarter.
The company said on a conference call yesterday that the supply restrictions would affect iPhone and iPad phones during the current quarter. The slowdown in demand for services will lead to a decline in its activity. Apple declined to provide specific revenue forecasts.
The cautious comments follow a 36% increase in third-quarter sales to $ 81.4 billion in revenue, breaking Wall Street estimates to $ 73.8 billion. But investors are sticking to a wait-and-see stance as parts shortages and COVID-19 restrictions will continue to weigh on Apple’s business this year.
The warnings come despite sales of Apple’s flagship iPhone, which rose nearly 50% to $ 39.6 billion in the fourth quarter, beating expectations of $ 34.6 billion. The third quarter is typically Apple’s slowest time – consumers expect new phones to launch around September – but the iPhone 12’s 5G technology appears to have helped the company reverse that trend.
The company reported third-quarter net profit of $ 21.74 billion, or $ 1.30 per share, from $ 11.25 billion, or 65 cents per share, a year earlier. Analysts tracked by FactSet had expected earnings per share of just $ 1.01.
The company also continues to expect “strong” double-digit growth in the fourth quarter.
“The record operating performance for the quarter ended June included new revenues in each of our geographic segments,” CFO Luca Maestri said in a statement. He added that Apple continues to make significant investments to support long-term growth, and generated $ 21 billion in operating cash flow and returned $ 29 billion to shareholders in the third quarter.
Display restrictions
Apple announced $ 7.37 billion, or 12% growth, in iPad revenue, beating expectations of $ 7.13 billion. Apple also introduced new iPad Pro models in April, but the lineup was restricted due to issues building new screens for the larger models.
For the Mac, Apple reported revenue of $ 8.24 billion, a growth of 16%, beating Wall Street analysts’ estimates of $ 8 billion.
Apple also previously warned that third quarter revenue would be affected by the lack of chips affecting some components of iPads and Macs. Third-quarter earnings were $ 1.30 per share, compared to an estimate of $ 1.01 per share.
Service revenues were $ 17.5 billion, more than the estimate of $ 16.3 billion and a third higher than the same period last year.
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