Apple expects shortages to slash sales
IPhone maker could see losses of up to $8 billion in revenue
Apple shares slid after the iPhone maker predicted that supply constraints would cost $4 billion to $8 billion in revenue during the current quarter, casting a pall on record-setting results that the company just reported.
Covid restrictions, which have swept China in recent weeks, will take a toll on the June quarter, Apple said during a conference call Thursday. The fiscal second quarter's sales and profit had topped analysts' estimates, fueled by strong demand for the iPhone and digital services, and the company announced
$90 billion in new stock buybacks. The shares slipped less than 1% as the market opened in New York on Friday.
The outlook renewed fears that supply-chain woes will continue to roil the tech industry following a short-lived
recovery from pandemic struggles. Companies ranging from Microsoft to Texas Instruments have already said that China's COVID-19 lockdowns will crimp sales and make it harder to produce products like the Xbox. The Xi Jinping administration has embraced a strict Zero COVID policy to stop the pandemic's spread, reverberating through the world's supply lines.
Chip shortages and the Ukraine war also are causing disruptions, Chief Executive Officer Tim Cook said during the call.
“We are not immune to these challenges, but we have great confidence in our teams, and our products and services — and in our strategy,” he said.
The stock had already fallen about 7.8% this year before the company gave the warning, hurt by a broader tech downturn. Apple had gained 34% in 2021, its third straight year of increases.
The latest supply woes didn't begin until the very end of March, Apple said, so the last quarter wasn't