Apple reports record quarter in spite of supply issues

Apple earnings

Apple reported its fourth-quarter results on Thursday after the market closed. While most shareholders were already expecting a solid quarter, the tech giant ended up shattering its previous records. Even more impressive for the company is that Apple did so despite warning of supply issues and an ongoing parts shortage.

Apple’s CEO Tim Cook said in an interview that these issues would end up being resolved sometime this year. Analysts were initially expecting Apple’s Q4 results to be a lot more muted, with some experts warning that iPhone demand might be lower than expected. In particular, the company’s iPhone 13 supposedly were seeing less demand than initially expected.

We saw supply constraints across most of our products. We’re forecasting that we will be less [constrained] in March than we were in the December quarter,” said Tim Cook in an interview Thursday as the company released its results.

As for the results themselves, Apple reported that revenue grew to $123.9 billion, an 11% increase from last year, while net profits reached $34.6 billion. Both figures were well above Wall Street’s initial expectations. The company added that it expects revenue and profit growth to keep going into the upcoming first quarter of 2022 as well. However, Cook hesitated when it came to making a concrete prediction, citing that the supply-side situation could end up worsening.

Cook also said that the company is seeing inflation pressure, adding that it’s making it harder to price Apple products. The consumer price index recently showed that prices rose by 7% back in December.

U.S. tech stocks have been taking a beating over the past weeks. Since the year began, Apple has fallen more than 10%. Most of these concerns are due to the expected interest rate hikes coming later this year. However, it also didn’t help that the Q4 earnings season started off on a weak note, with banking and tech stocks reporting some mixed results at first.

Companies like Microsoft already reported their own Q4 results earlier this week, which managed to impress investors as well. Google and Meta Platforms will both be reporting their Q4 results next week as well. Given that both Microsoft and Apple’s results were better-than-expected, many are now expecting strong results from Google and Meta.

Shares of Apple were up around 4.0% in pre-market trading. While Apple is still down around 8.5% since the year began, when you look at a 12-month time frame, shares are up a mild 16.2%.


Apple Company Profile

Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Card, and Apple Pay, among others. Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News