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April 29, 2022

Apple shares dip after company warns of a possible $8 billion hit from supply constraints

  • Apple’s revenue grew nearly 9% year over year during the quarter ended in March.
  • But shares fell nearly 4% in extended trading after Apple CFO Luca Maestri warned of challenges in the current quarter, including supply constraints that could hurt sales by up to $8 billion.
  • The tech giant authorized $90 billion in share buybacks.

Apple’s revenue grew nearly 9% year over year in the quarter ended in March, the company said on Thursday, showing strong growth and bucking investor worries about a deteriorating macroeconomic environment affecting demand for high-end smartphones and computers. 

But Apple shares fell nearly 4% in extended trading after Apple CFO Luca Maestri warned of several challenges in the current quarter, including supply constraints related to Covid-19 that could hurt sales by between $4 billion and $8 billion. The tech giant also warned that demand in China was being sapped by Covid-related lockdowns.

Apple CEO Tim Cook added the company was “not immune” to supply chain challenges.

Here’s how Apple did versus Refinitiv consensus estimates:  

  • EPS: $1.52 vs. $1.43 estimated 
  • Revenue: $97.28 billion vs. $93.89 billion estimated, up 8.59% year over year 
  • iPhone revenue: $50.57 billion vs. $47.88 billion estimated, up 5.5% year over year 
  • Services revenue: $19.82 billion vs. $19.72 billion estimated, up 17.28% year over year 
  • Other Products revenue: $8.81 billion vs. $9.05 billion estimated, up 12.37% year over year 
  • Mac revenue: $10.44 billion vs. $9.25 billion estimated, up 14.73% year over year 
  • iPad revenue: $7.65 billion vs. $7.14 billion estimated, down 1.92% year over year 
  • Gross margin: 43.7% vs. 43.1% estimated 

Apple did not provide a forecast for the current quarter — the company hasn’t provided official revenue guidance since February 2020, citing uncertainty tied to the pandemic.  

In addition, Apple said that its board of directors authorized $90 billion in share buybacks, maintaining its pace as the public company that spends the most buying its own shares. It spent $88.3 billion on buybacks in 2021, according to S&P Dow Jones Indices.  

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