Apple reports strong second quarter, but warns of $4-8 billion hit by Covid and supply chain

Apple on Thursday reported better-than-expected earnings amid continued strong consumer demand, but warned that China’s Covid-19 lockdown and ongoing supply chain issues would hit June quarter results by 4 at $8 billion.

The iPhone maker had another strong performance for the period ending March 26, posting record revenue for the quarter. But executives said the hardships of the pandemic have returned with a vengeance since the reporting period ended.

“Supply constraints caused by Covid-related disruptions and industry-wide silicon shortages are impacting our ability to meet customer demand for our products,” said CFO Luca Maestri on a conference call with analysts.

“We expect these constraints to be in the range of $4 billion to $8 billion, which is significantly larger than what we experienced in the March quarter. »

The impact will depend on how quickly production ramps up in the Shanghai region, where factories recently started to reopen after a Covid-19 lockdown, said chief executive Tim Cook, who said that Apple was not “immune” to inflation. challenges that disrupt the economy.

Maestri declined to provide an overall revenue forecast for the June quarter. Executives also avoided giving outlook on semiconductor supplies.

Apple reported earnings above expectations, citing strong consumer demand despite supply chain challenges Photo: GETTY IMAGES NORTH AMERICA via –/Drew Angerer

In the March quarter, the tech giant reported profit of $25 billion, up 5.8% from the same period last year, as revenue rose 9% for reach $97.3 billion.

Results looked good after some Big Tech peers stumbled as growth in stay-at-home demand amid the pandemic slows and companies grapple with rising operating and labor costs work.

The company saw revenue increases across most of its categories, including iPhone and Services. But iPad sales have slumped, with Maestri pointing to supply chain constraints on a conference call with analysts.

The strongest growth by region was in the Americas, with the company also reporting moderate revenue increases in Europe and Greater China. Revenues fell in Japan and other Asian markets.

Apple said it authorized $90 billion in additional stock buybacks.

Shares initially rose after the report but fell 2.5% to $159.55 in after-hours trading. Shares were up 4.5% during Thursday’s session ahead of earnings.

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