Apple continues to have supply issues despite a strong start to the year

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As the COVID-19 lockdowns grow on production and demand in China, the Ukraine conflict dents sales, and service development slows down, Apple Inc. forecast more serious issues on Thursday. A conference call with executives sparked a 2.2% drop in the company’s stock price in late trading. Apple’s financial second quarter, which ended in March, was overshadowed by the good news, as the company posted record profits and sales. The $24 billion profit, or $1.52 per share, exceeded the $23.2 billion and $1.43 per share estimates of the auditors.

CEO Tim Cook said that nearly all of Apple’s final assembly factories in China have reopened following the recent COVID shutdowns, but the company is unable to predict when the chip shortage, which mostly affects older products, will be resolved.

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Apple’s CFO, Luca Maestri, warned in an interview that the war in Ukraine, which caused the company to halt sales in Russia, would have a greater impact on sales in the third fiscal quarter. According to his remarks to analysts during his conference call, this quarter’s sales hit would be “substantially larger” than the second quarter’s due to supply-chain issues.

Overall, according to Refinitiv data, Apple earned $97.3 billion in the second quarter, an increase of 8.6% from the same period the previous year and higher than the average analyst estimate of $93.89 billion.

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