Apple Revenues Disappoint First Time Since 2018: ETFs in Focus

After the closing bell yesterday, Apple Inc (NASDAQ:AAPL). AAPL came up with dismal fourth-quarter fiscal 2021 results. The tech giant missed revenue estimates for the first time since 2018 and earnings per share came on par. Sales of iPhones, iPads and wearables were all lower than expected as supply constraints cost the company roughly $6 billion in revenues.

Apple Q4 Results in Focus

Earnings per share came in at $1.24, in line with the Zacks Consensus Estimate but higher than the year-ago earnings of 73 cents. Revenues increased 29% year over year to a record $83.4 billion and fell short of the estimate of $85.5 billion. This marks the first quarterly revenue miss since 2018 amid supply constraints resulting from a shortage of computer chips (see: all the Technology ETFs here).

Apple has been struggling with supply shortages that have made it more difficult to meet demand for a wide range of products. In fact, the crunch has caused the delay in releasing the latest iPhone model until October and November instead of Apple’s usual late-September timeline.

iPhone sales jumped 47% to $38.9 billion from $26.4 billion reported in the year-ago quarter. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, climbed to a record $18.3 billion from $14.5 billion in the year-ago quarter. Revenues from Wearables, Home and Accessories, which include Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, soared to $8.8 billion from $7.9 billion. iPad sales rose to $8.3 billion from $6.8 billion in the year-ago quarter and Mac sales increased to $9.2 billion from $9 billion. Meanwhile, sales in China jumped 83% year over year to $14.6 billion.

Apple now has 745 million paid subscribers on its platform, up from the 700 million it reported a quarter ago.

Following the revenue miss, shares of Apple dropped as much as 5% in after-hour trade as supply issues are expected to continue into fiscal 2022. The stock currently has a Zacks Rank #2 (Buy) and VGM Score of B. It belongs to a top-ranked Zacks industry (top 6%).

ETFs to Buy

Given this, ETFs with the largest allocation to the tech titan have been in focus. These funds have Apple as the top or second firm with a double-digit allocation and sport a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Select Sector SPDR Technology ETF XLK

This most popular technology ETF has $46.8 billion in AUM and charges 12 bps in fees per year from its investors. AAPL makes up for roughly 21.7% of the assets (read: Should You Buy the Dip With These Top-Ranked Tech ETFs?).

Vanguard Information Technology ETF VGT

This fund manages about $52.7 billion in its asset base with 19.7% allocation in Apple. It has 0.10% in expense ratio.

MSCI Information Technology Index ETF FTEC

With AUM of $6.6 billion, the product allocates 19.7% in Apple. The ETF has 0.08% in expense ratio.

iShares Dow Jones US Technology ETF IYW

This ETF provides investors exposure to technology stocks with 16.3% allocation in Apple. The fund has AUM of $9 billion and charges 41 bps in fees and expenses.

Invesco QQQ QQQ

This ETF provides exposure to the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. Apple accounts for 11% share. It has AUM of $195.9 billion and charges 20 bps in annual fees (read: Nasdaq ETFs Worth Betting on Before Major Tech Earnings Releases).

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Apple Inc. (AAPL): Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Technology Select Sector SPDR ETF (NYSE:XLK): ETF Research Reports

Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports

iShares U.S. Technology ETF (IYW): ETF Research Reports

Vanguard Information Technology ETF (VGT): ETF Research Reports

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