Apple has a good quarter, but warns of problems ahead | Your money


SAN RAMON, Calif. (AP) — Apple on Thursday reported strong quarterly results despite supply shortages, but warned that its growth slowdown is expected to worsen. The company said it was still struggling to get enough chips to meet demand and deal with COVID-related shutdowns at factories in China that make iPhones and other products.

Although early results for the January-March period beat analysts’ forecasts, the good news was quickly overshadowed when management warned of trouble ahead on a conference call.

The main takeaway: Apple’s sales will be much harder hit by supply issues in the current April-June quarter than in the previous one. The company estimated that it would result in revenue of $4 billion to $8 billion.

“It will affect most product categories,” Apple CEO Tim Cook told analysts.

Apple’s stock price fell 4% in extended trading, reversing a positive response after the initial release of the Apple report. Before sobering forecasts dragged stocks down further, Apple stock had fallen 10% from its peak in early January.

“It was a strong quarter, but it looks like COVID has reared its ugly head,” Edward Jones analyst Logan Purk said. “It seems like two steps forward, one step back.”

Like a wide range of companies from automakers to healthcare providers, Apple is grappling with shortages of computer chips and other key technology components required in modern products.

Apple expected the slump to ease as this year progressed, but recent COVID outbreaks are beginning to curtail production at the Chinese factories the company relies on.

Despite these headwinds, the results for the January-March period painted a picture of an ever-expanding empire generating massive profits that earned the company a market value of $2.7 trillion – the largest among American companies.

Apple announced a 5% increase in its quarterly dividend, which has been rising since the company reinitiated payment a decade ago. Effective May 12, Apple’s new quarterly dividend will be 23 cents per share, more than double from 10 years ago.

Even without these supply issues, Apple would still face some of the same challenges faced by many other big tech companies. After enjoying a boom caused by the pandemic, it is becoming increasingly difficult to deliver the same levels of spectacular growth that have driven the stock prices of technology companies to record highs. The crisis continues to fade and year-over-year growth has become more difficult to sustain.

Apple’s last quarter illustrated the high hurdles the Cupertino, Calif. company is now trying to overcome. Revenue for the period totaled $97.3 billion, but was only 9% higher than the same period last year. It’s the first time in the past six quarters that Apple hasn’t posted double-digit year-over-year revenue gains. That figure, however, topped the $94 billion average revenue estimate among analysts polled by FactSet Research, indicating that Apple’s slowing growth hasn’t been as severe as investors expect. had planned.

Quarterly profit was $25 billion, or $1.52 per share, a 6% increase over the same period last year. Analysts had forecast earnings per share of $1.42.

As usual, the iPhone remains Apple’s flagship product with sales of $50.6 billion in the last quarter, up 5% from the same period last year. Apple has tried to maintain iPhone sales growth as chips remain scarce by siphoning off some components from the iPad, which saw sales drop 2% from a year ago to 7.6 billion. dollars.

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