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Apple Slips as Supply Chain Woes Make Sales Growth Fall Short

Published 10/29/2021, 05:25 AM
Updated 10/29/2021, 05:30 AM
© Reuters.
AAPL
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By Dhirendra Tripathi

Investing.com – Apple stock (NASDAQ:AAPL) traded 3.3% lower in Friday’s premarket as the company warned of even more severe supply chain challenges in the busy holiday season following a $6 billion hit to sales in the three months through September.

The world’s most valuable company had managed to keep semiconductor shortages and supply chain bottlenecks, issues hurting just about every maker of cars and gadgets, at bay for a long time. But they finally came to hurt the company. Sales of older models as well as the new iPhones, Macs, watches and iPads it launched earlier this year couldn’t reach customers in time. Buyers have been told to wait for 3-4 weeks to get their new device.

The company’s fourth-quarter revenue of $83.36 billion fell short of expectations, a rare miss for a company. Net profit rose 62% to $20.55 and beat expectations. Profit was higher partly because the company managed to keep a lid on operating expenses.

Sales of iPhones rose about 14% to $38.86 billion.

CEO Tim Cook told Reuters the chip shortage has persisted and is now affecting "most of our products”.

The accessories segment, comprising AirPods wireless headphones and watches, grew over 11% to $8.8 billion. Accessories are a key growth area for the company as it tries to broaden its portfolio. The company still depends on the iPhone for around 47% of revenue.

Revenue from iPhones and accessories fell short of expectations, according to analysts polled by Reuters.

Sales for iPads and Macs were $8.3 billion and $9.2 billion, respectively.

The company's services segment -- a work-in-progress for the company known for its devices -- had sales of $18.3 billion, up 26%. It comprises the App Store and Apple Music businesses.

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