5G iPhone upgrades have greatly fueled the sales and profits ahead of Wall Street expectations, reported the Apple. And there is also a warning due to the shortage of global chip. Because this in turn could dent iPads and Mac sales by several billion dollars.
Fiscal second-quarter sales to China nearly doubled and results topped analyst targets in every category, led by $6.5 billion more in iPhone sales than predicted and Mac sales about a third higher than estimates. A day after Alphabet Inc promised to repurchase $50 billion in stock, Apple made an announcement. In that Apple had stated a $90 billion share buyback.
Apple avoided a chip shortage in the fiscal second quarter by burning through supply buffers, stated Tim Cook, Chief Executive Officer of Apple, on an investor call. Chief Financial Officer Luca Maestri stated that, in the fiscal third quarter, the shortage could cost the company $3 billion to $4 billion in revenue.
Cook also stated that the iPhone and Mac are primarily affected by the short falls and so they have some challenges over there. Later on, he also added that there could be trouble sourcing semiconductors made with older chipmaking technology. The shortage slashed production in half in its second quarter. Cook stated that Apple is competing with other industries for chip making capacity. Its very difficult to predict the end of shortage.
For the fiscal second quarter ended March 27, Apple said sales and profits were $89.6 billion and $1.40 per share, compared with estimates of $77.4 billion and 99 cents per share. Haris Anwar, senior analyst at Investing.com, said that as consumers are upgrading to 5G, iPhones were the biggest driver of growth.
Because of Apple’s in-app payment rules and app review policies, one of its fastest-growing businesses, App store has come under increased antitrust scrutiny. As new Apple privacy policies will make it more difficult to target ads, Facebook warned that its growth rate could significantly decline. Sales of Macs and iPads were $9.1 billion and $7.8 billion, respectively, compared with FactSet estimates of $6.8 billion and $5.6 billion.
Apple investors are looking for growth from Apple’s accessories business. Shares of Apple are up some 93% over the past year, compared with a 61% rise for the Nasdaq 100 index of which Apple is a component.
