Delivery problems negatively impact Apple‘s quarterly results

Delivery problems negatively impact Apple‘s quarterly results

24 November 2021Reading time: 3 minutes

Apple reported a revenue of USD 83.4 billion for the fourth quarter of the fiscal year 2021, which ended on September 25. Although this is the highest fourth-quarter turnover ever for the American tech giant, analysts had expected an average quarterly turnover of USD 85 billion. The revenue growth of almost 29 percent on an annual basis, is also lower than the turnover growth in the third quarter of 36 percent. Net income for the fourth quarter was USD 20.6 billion and USD 1.25 per share, which was in line with expectations.

For the entire fiscal year 2021, total revenue came in at USD 365.8 billion, or an annualized increase of 33.3 percent. Net income was up 65 percent year-on-year to USD 94.7 billion. For investors, this resulted in an earnings per share of USD 5.61.

Persistent shortage of production capacity and chips

The main driver for the slowing sales growth lies within Apple's supply chain. Due to the outbreak of Covid-19, there have been capacity problems within especially Asian factories. In addition, Apple is experiencing more and more problems due to a worldwide shortage of semiconductors, while the demand for Apple's products has increased due to social distancing.

In the fourth quarter, Apple therefore saw its iPhone sales rise by approximately 47 percent to USD 39 billion year-on-year. However, that is significantly less than the 56 percent revenue growth that analysts had anticipated for this product group. Quarterly revenue from iPad and Mac computer sales, did met expectations at USD 8.3 billion and USD 9.2 billion. The shortage of chips therefore mainly affected the sale of iPhones and according to CFO Luca Maestri, Apple would have lost about 6 billion dollars in revenue in the past quarter.

The outlook for the current quarter, which includes the holidays, is even less promising. CEO Tim Cook expects that the supply problems will now also affect the other product groups. As a result, the lost revenue in the current quarter is expected to increase even further. Management indicates that it is doing everything it can to maintain both production capacity and the supply of chips where possible. Analysts expect a revenue of USD 119.7 billion for the first quarter of the fiscal year 2022, an increase of 7.4 percent compared to the same period last year. It remains to be seen whether the problems within the supply chain can be solved in the new fiscal year.

Stock price development

After publication of the quarterly and annual figures by Apple, investors reacted disappointed. The share fell by 3.4% after trading hours. On an annual basis, the share price is still 24.7 percent higher and is now (15.11.2021) at USD 149.99.

The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Don’t miss any investment idea. Subscribe now to the Vontobel newsletter!

Vontobel products on Apple are tradable at DEGIRO.

Discover Vontobel’s product on our Website.

Important legal information:
This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.
Fordetailed information, particularly regarding the structure and the risks associated with an investment in the derivative financial instruments, prospective investors should read the Base Prospectus, which is available together with the Final Terms and any supplement to the Base Prospectus in electronic form on the issuer’s website: Additionally, the Base Prospectus, anysupplements to the Base Prospectus and the Final Terms are available inprinted form, free of charge, at the registered office of the issuer: Vontobel Europe AG, Bockenheimer Landstrasse 24, 60323
Frankfurt am Main, Germany.

Investors should consider the applicable selling restrictions.
Companies of the Vontobel group may directly or indirectly pay commissions in varying amounts to third parties (e.g. brokers) in connection with the public offer and the distribution of the derivative financial instruments. Further information is available upon request from your distribution partner. 

28/11/2023 16:26:28