Apple (AAPL) This fall 2021 earnings

Apple income fell in need of Wall Avenue expectations in its fiscal fourth quarter on Thursday, which Apple CEO Tim Cook dinner attributed to larger-than-expected provide constraints on iPhones, iPads, and Macs.  

Apple fell below 3% in prolonged buying and selling.  

“We had a really sturdy efficiency regardless of bigger than anticipated provide constraints, which we estimate to be round $6 billion,” Cook dinner informed CNBC’s Josh Lipton. “The availability constraints have been pushed by the trade extensive chip shortages which were talked about rather a lot, and COVID-related manufacturing disruptions in Southeast Asia.” 

Nonetheless, Apple’s general income was nonetheless up 29% and every of its product classes grew on an annual foundation.  

This is how Apple did versus Refinitiv consensus estimates: 

• EPS: $1.24 vs. $1.24 estimated 
• Income: $83.36 billion  vs. $84.85 billion estimated, up 29% year-over-year 
• iPhone income: $38.87 billion vs. $41.51 billion estimated, up 47% year-over-year 
• Providers income: $18.28 billion vs. $17.64 billion estimated, up 25.6% year-over-year 
• Different Merchandise income: $8.79 billion vs. $9.33 billion estimated, up 11.5% year-over-year 
• Mac income: $9.18 billion vs. $9.23 billion estimated, up 1.6% year-over-year 
• iPad income: $8.25 billion vs. $7.23 billion estimated, up 21.4% year-over-year 
• Gross margin: 42.2% vs. 42.0% estimated  

iPhone gross sales have been up 47% year-over-year, however nonetheless got here in below Wall Avenue estimates. 

Apple hasn’t supplied official steering for the reason that begin of the pandemic, however Cook dinner stated Apple expects “stable year-over-year income progress” within the December quarter regardless of the very fact Cook dinner stated Apple will face worse provide constraints, increased than the $6 billion hit to income within the September quarter. Nonetheless, Apple says that its December quarter would be the firm’s largest when it comes to income in its historical past.

Apple CFO Luca Maestri stated in a name with analysts that iPad gross sales would decline year-over-year within the December quarter resulting from provide constraints whereas different product classes would develop.

“So we have completed a few month of the quarter. The Covid associated manufacturing disruptions have improved enormously. The chip shortages linger on,” Cook dinner stated.  

Cook dinner stated that the provide points have been with chips on “legacy nodes,” or older chips, as a substitute of the technologically superior processors on the coronary heart of Apple’s gadgets.  

The expectation of year-over-year gross sales progress means that Apple sees considerably extra demand for its new iPhone 13 fashions than it might probably provide. Apple’s fourth quarter solely included a couple of days of iPhone 13 gross sales because it ended on Sept. 25. 

Apple is at the moment in the course of huge progress as gross sales of iPhones, iPads and Macs exploded throughout the pandemic. Apple’s annual income for its fiscal 2021 was up 33% from 2020 to $366 billion. 

The strongest progress in Apple product classes apart from iPhones was in its companies enterprise, which incorporates gross sales from the App Retailer, music and video subscription companies, promoting, prolonged warranties, and licensing. Apple’s companies grew 26% yearly, which Cook dinner stated was increased than the corporate anticipated.  

Cook dinner stated that Apple has 745 million paid subscriptions, which not solely contains first-party companies like Apple Music but in addition subscriptions via Apple’s App Retailer.  

“That is up 160 million yr on yr, which is up 5 instances in 5 years. So it has been fairly the expansion cycle,” Cook dinner stated.  

Apple’s Macs didn’t develop strongly, solely growing 1.6% yearly, however the quarter didn’t embrace gross sales of new MacBook Professional fashions that have been introduced in October. Apple’s iPads grew 21% year-over-year, though they have been provide constrained. Apple’s Different Merchandise class, which incorporates Apple Watch and AirPods fashions, grew 11% with out new merchandise, which went on sale in October.  

This quarter marks the primary time since April 2016 that Apple has did not beat earnings estimates, and it is the primary time since Could 2017 that Apple’s revenues have missed estimates, based on Refinitiv information.