Apple warns of bigger supply chain problems ahead after strong start to year
- Apple’s overall fiscal second-quarter revenue was US$97.3 billion, up 8.6 per cent from last year and higher than analysts’ average estimate of US$93.89 billion
- Investors have been bracing for slower consumer spending on tech gadgets and services as the war in Ukraine and other factors drive up the cost of oil and food
Apple on Thursday forecast bigger problems as Covid-19 lockdowns snarl production and demand in China, the war in Ukraine dents sales and growth slows in services, which the iPhone maker sees as its engine for expansion.
Shares were down 2.1 per cent after executives laid out their glum outlook on a conference call. The news outweighed strong results, including record profit and sales, for Apple’s fiscal second quarter, which ended in March.
Chief financial officer Luca Maestri warned in an interview that the war in Ukraine, which led Apple to stop sales in Russia, would leave a bigger dent on sales in the fiscal third quarter.
He told analysts on the call that supply chain issues would hurt sales in the current quarter by US$4 billion to US$8 billion, “substantially larger” than the hit in the quarter to March.
Supply chain problems were focused on a corridor in Shanghai and reflected Covid-19 disruptions and silicon shortages, Maestri added. The pandemic was also affecting demand in China, he said.