Cook told Reuters on Thursday the quarter ended September 25
had "larger than expected supply constraints" as well as
pandemic-related manufacturing disruptions in Southeast Asia. While Apple had
seen "significant improvement" by late October in those Southeast
Asian facilities, the chip shortage has persisted and is now affecting
"most of our products," Cook said.
"We're doing everything we can do to get more (chips)
and also everything we can do operationally to make sure we're moving just as
fast as possible," Cook said.
Cook said the company expects year-over-growth for its
quarter ending in December. Analysts expect growth of 7.4 percent to $119.7
billion.
"We're projecting very solid demand growth year over
year. But we are also predicting that we're going to be short of demand by
larger than $6 billion," Cook said.
Shares of the Cupertino, California-based company, which had
risen nearly 15 percent this year, fell 3.4 percent in extended trading on
Thursday. The dip could make Microsoft the world's most valuable company after
a run-up in Microsoft shares on the strength of its cloud computing business.
Apple's results were mixed in a fiscal fourth quarter seen
as a lull before the high-sales holiday end of year.
Apple said revenues and profits for the fiscal fourth
quarter were $83.4 billion and $1.24 per share, compared with analyst estimates
of $84.8 billion and $1.24 per share, according to IBES data from Refinitiv.
The results were a rocky end to a fiscal year of
above-expectations sales led by its iPhone 12 models and strong sales of Mac
computers and iPads for working and learning from home during the COVID-19 pandemic.
Apple told investors in July that chip constraints would
start to hit its iPhone and iPad lineups for the first time in the fourth
quarter.
Apple posted its results shortly after retailer Amazon
forecast holiday-quarter sales well below Wall Street expectations, citing
labor supply shortages and global supply chain issues in part.
Apple has "managed to navigate the problems fairly
well, but hasn't escaped unscathed, and an extended duration of these problems
will spell trouble, especially because the market is unforgiving when it comes
to Apple's performance," said Sophie Lund-Yates, equity analyst at
Hargreaves Lansdown.
Misses
Apple missed expectations in two key categories.
Apple said fourth-quarter iPhone sales were $38.9 billion,
short of estimates of $41.5 billion, according to Refinitiv data.
Cook said that chips made with older technology remain the
key supply constraint. He said that Apple remains unsure whether the shortages
will ease after the holiday shopping season.
"It's very difficult to call," Cook told Reuters.
The company's accessories segment, which contains
fast-growing categories like its AirPods wireless headphones, came in at $8.8
billion, half a billion dollars lower than analyst expectations of $9.3 billion,
according to Refinitiv data.
Other segments fared better. Sales for iPads and Macs were
$8.3 billion and $9.2 billion compared with analyst estimates of $7.2 billion
and $9.2 billion, according to Refinitiv data.
The company's services segment — which contains its App
Store business — had sales of $18.3 billion in revenue, up 26 percent, compared
with analyst expectations of $17.6 billion. Cook told Reuters that Apple now
has 745 million paid subscribers to its platform, up from the 700 million it
disclosed a quarter ago.
"Services were strong, and it shows the beauty and
durability of software and services, as there are better margins and no supply
issues, since software doesn't arrive on a container ship," said Hal
Eddins, chief economist at Apple shareholder Capital Investment Companies.
© Reuters