Apple stock is trading lower after the company posted revenue that fell short of consensus estimates by about $1.5 billion. But analysts see this as a temporary issue, tied to supply chain issues from COVID disruptions, a short term concern, not one for the long run.
At the root of the issue is Apple’s disclosure that sales for the September quarter were reduced by about $6 billion due to a combination of chip shortages and Covid-related manufacturing issues in Southeast Asia.
In recent weeks, there have been widespread reports that the company has been having trouble getting enough camera modules
for high-end versions of the iPhone 13 from its supplier in Vietnam, where travel restrictions hampered factory operations. CEO Tim Cook told investors that the manufacturing issues have been resolved, but he declined to guess when the parts situation would improve. The company said the hit to revenue from supply issues would be higher this quarter than in the September quarter.
Analysts can do arithmetic, and they conclude that Apple would have crushed revenue and profit estimates for the quarter if it had had the goods to sell
Given that there generally aren’t good substitutes for most Apple products—it is hard to imagine many people buying Android phones rather than waiting a few extra weeks to get an iPhone 13 Pro Max—the view on the Street is that Apple is dealing with delayed sales, not demand destroyed. That sets the stage for strong quarters in March and beyond.
MacDailyNews Take: Exactly.
As we wrote this morning, “Profit from irrational overreaction. This too shall pass.”
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Debt has “weight,” and especially so as value stocks increasingly show their strength over the growth equities…incl APPL. The “switch” from growth to value is solidly percolating…not necessarily confirmed, but inflation greatly impacts growth and it’s obviously not “transitory.” It’s increasing.
AAPL morphed drastically when Cook assume the reigns. Assuming debt to buy back stocks has been a major strategy under his leadership. It’s a method that appeals to Wall St, as lower share count increases EPS, b/c share count has decreased, even though ACTUAL earnings per share are less. It’s loved by large holders of AAPL…ask Warren B, but its effect on low count share holders is hardly tangible.
Buy backs are a tool for “appearance” and filling the pockets of the Big Boys/Girls. I wish TC disliked debt as much as SJ. Same for buy-backs. Debt for appearance and personal benefit, vs M & A/R & D can be quite costly in the end.
Since when is a $2.5T company that delivers 33% revenue growth, 65% profit growth, and 72% EPS growth year-over-year not a growth stock?
Never mind me, don’t let real numbers get in the way of your narrative…
I believe the writer said the transition is “percolating” & “not confirmed.”
It’s well noted in writings of astute economists and those well versed in history’s effect of inflation on growth companies…it’s slows growth. In effect, it’s hardly a statement of reach.
The writer quipped that “maybe his (your) own narrative affected comprehension” when reading his post.
Debt is dumber than a dementia-laden Presidente of the Socialist Republic of USA, Brandonville