Apple Fiscal Q4 revenues miss due to supply constraints

Apple has posted financial results for its fiscal 2021 fourth quarter ended September 25, 2021, posting a September quarter revenue record of $83.4 billion, up 29 percent year over year, and quarterly earnings of $20.6 billion , or $1.24 per share.

In a conference call with analysts, Apple CEO Tim Cook estimated supply shortages cost the company about $6 billion in sales during the quarter. The company’s chief financial officer, Luca Maestri, warned sales will be hurt even more during the current quarter that covers the holiday shopping season.

“This year we launched our most powerful products ever, from M1-powered Macs to an iPhone 13 line-up that is setting a new standard for performance and empowering our customers to create and connect in new ways,” said Tim Cook, Apple’s CEO.
“We are infusing our values into everything we make — moving closer to our 2030 goal of being carbon neutral up and down our supply chain and across the lifecycle of our products, and ever advancing our mission to build a more equitable future.”

Apple’s fiscal year ends in September, meaning that this earnings report corresponds to its fiscal fourth quarter.

Apple outperformed expectations when it came to the key metric of services revenue. The company reported services revenue of $18.3 billion as compared with a predicted $17.6 billion for the quarter. Apple’s services include the company’s digital content stores and streaming services, such as its various App Store platforms, Apple Music, Apple Arcade, Apple News+, and Apple TV+, as well as cloud services, Apple Pay, and other offerings.

Services revenue is especially important as a sign of Apple’s financial future because profit margins on services sales are significantly larger than on Apple’s hardware profits. That means that each dollar of added service sales disproportionately boosts Apple’s profits compared to hardware sales.

“Our record September quarter results capped off a remarkable fiscal year of strong double-digit growth, during which we set new revenue records in all of our geographic segments and product categories in spite of continued uncertainty in the macro environment,” said Luca Maestri, Apple’s CFO.
“The combination of our record sales performance, unmatched customer loyalty, and strength of our ecosystem drove our active installed base of devices to a new all-time high. During the September quarter, we returned over $24 billion to our shareholders, as we continue to make progress toward our goal of reaching a net cash neutral position over time.”

Apple did not provide forward guidance in its earnings report. Shares of Apple stock fell sharply in after-hours trading following the earnings release, dropping by about 4%.

Apple’s board of directors has declared a cash dividend of $0.22 per share of the Company’s common stock. The dividend is payable on November 11, 2021 to shareholders of record as of the close of business on November 8, 2021.