Apple’s earnings take a hit due to supply woes

Apple‘s iPhone sales suffered due to supply shortages that have made it more difficult to meet the demand for a wide range of products although they did grow in number in the past quarter.

CEO Tim Cook estimated that supply shortages cost the company about $6 billion in sales during the quarter.

Apple’s chief financial officer, Luca Maestri, warned sales will be hurt even more during the current quarter that covers the pivotal holiday shopping season

The company earned $20.6 billion, or $1.24 per share, during the July-September period, a 62% increase from the same time last year. Revenue climbed 29% from the same time last year to $83.4 billion.

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The supply shortages that have curtailed production of everything from automobiles to video game consoles haven’t been a major problem for Apple until recently. The quarterly results released by the tech giant on Thursday are evidence of its products’ continuing success. But they also say that Apple is not immune to the supply headaches.

That sobering reality likely was the main reason that Apple’s stock price declined by more than 3% in extended trading after the numbers came out.

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The iPhone continued to drive Apple’s financial engine, with sales of the device rising 47% from last year to $38.9 billion for the quarter. But it fell well short of the predictions of roughly $41 billion for the quarter.

The period marked the end of Apple’s fiscal year — a stretch in which iPhone sales totaled $192 billion, by far the biggest volume recorded by the company since the device’s debut in 2007.

Apple’s previous iPhone record came in fiscal 2018 when sales of the device totaled $165 billion.

The gains posted in the latest quarter were skewed by supply shortages that caused the release of last year’s model, the iPhone 12, to be delayed until October and November instead of Apple’s usual late-September timeline.

This year’s new model, the iPhone 13, came out Sept. 24, helping the company based in Cupertino, California, ring up more sales of the device in the latest quarter.

The big numbers suggest there may be strong consumer interest in the iPhone 13, even though the model isn’t dramatically different from last year’s model.

Apple had been able to largely avoid major decreases in iPhone production, with Cook previously indicating that the supply shortages have primarily affected the company’s Mac laptops and iPads. Cook acknowledged the chip shortage is now preventing Apple from selling as many iPhones as it would like.

“Demand remains very robust,” he emphasized.