Apple’s stock slides as it blames supply chain constraints for its weak guidance
iPhone maker Apple Inc. reported better-than-expected earnings and revenue as it delivered its third quarter results, thanks to a 22% surge in handset sales. However, its stock was trading almost 6% lower in the late trading session after it issued weak guidance for the current quarter, blaming that primarily on “supply constraints.”
The company reported earnings before certain costs such as stock compensation of $2.02 per share, easily beating Wall Street’s target of $1.89 per share. Revenue for the period jumped 15% to $109.42 billion, surpassing the $108.65 billion analyst estimate. All told, Apple delivered net income of $29.79 billion in the quarter, up from $23.43 billion in the year-ago period.
Today’s conference call was notable because it’s the last to be led by Apple Chief Executive Tim Cook (pictured) before he hands over the reins of the company to John Ternus, a 25-year Apple veteran who currently serves as its head of hardware. Ternus was also present on the call, but let Cook do most of the talking.
Cook told analysts that Apple is dealing with a global memory crunch that he termed a “hundred-year flood,” and a scramble by companies to secure chip manufacturing capacity. It’s also seeing foreign currency headwinds, he said. As a result, it’s facing significantly higher costs, which have already forced it to increase prices for its Mac computers and iPads. The company has so far resisted increasing the prices of its iPhones, but most analysts believe that it will be forced to do so at some point this year.
