Apple supply shortages bite into revenues and cost iPhone maker $6bn

Apple revenues were slightly below forecasts but the technology giant achieved higher net profits than anticipated despite a components shortage that cost it $6bn in the quarter.

The $2.5tn company reported $83.4bn of revenue in its fiscal fourth quarter ending in September, up 29 per cent from a year ago but missing expectations of $84.3bn.

Apple shares fell 5 per cent on the revenues miss in after-hours trading. Net income beat forecasts, however, rising 62 per cent to $20.5bn, versus forecasts of $20.2bn.

The company declined to offer guidance for the holiday quarter, by far its most important sales period of the year, and it has not released guidance since the onset of the pandemic.

But Apple finance chief Luca Maestri told the Financial Times “demand is very, very strong” and he anticipates record revenues for the holiday season. “We wish we had more supply, from where we stand right now.”

He added: “We expect to set a December quarter record in spite of the fact that these supply constraints — the way we see them right now — we believe they’re going to be greater than the September quarter, the $6bn.”

Maestri said Apple now had 745m paying subscribers for its various services, up from 660m six months ago. That helped Apple’s Services business to expand 25.6 per cent from a year ago to $18.3bn — its second fastest-growing category after the iPhone.

The iPhone accounted for 46.6 per cent of all revenue last quarter, with smartphone sales up 47 per cent to $38.9bn. The comparison is flattered by Covid-related delays for the launch of the iPhone 12 a year ago, with overall revenues from Greater China in particular increasing 83 per cent to $14.6bn.

“This very strong performance was achieved in spite of the fact that the supply constraints that we had to deal with . . . were larger than expected — they were around $6bn,” Maestri said.

For the 12-month period, Apple said revenues rose 33.3 per cent to $365.8bn, its fastest growth rate since 2012. Net profits came close to $100bn for the year, rising 64.9 per cent to $94.7bn.

All five of Apple’s business divisions grew from a year ago, led by the iPhone and Services.

The Mac division only added 1.6 per cent to $9.18bn in revenue, while iPad sales jumped 21.4 per cent to $8.3bn.

Revenues at Wearables, a category that includes headphones and smart watches, increased 11.5 per cent to $8.8bn.