Analyst: The big question is how did supply chain disruptions impact Apple’s sales?

DA Davidson Research Analyst Tom Forte joined Yahoo Finance Live this week to preview Apple earnings and said that the big unknown is how much supply-chain disruptions impacted Apple’s holiday quarter sales.

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Yahoo Finance:

Forte: Sure. So when I think about Apple and I think about reporting the December quarter, the big question is, to what extent was supply-chain disruption — how did that impact their sales? We knew that in the September quarter, it had negatively affected their sales by $6 billion, and the expectation was that lost sales in the December quarter would be even greater than $6 billion. So I think the first thing we look for for Apple’s earnings is, how are they on the supply chain, when are things going to get better, and how should that affect their sales and earnings over the next 12 months?

Earnings for Apple could not have come at a better time because ultimately, when I think about sell-offs and I would think about pullbacks in the stock market, ultimately, investors are trying to determine what is the appropriate multiple to pay for a stock. So to the extent that Apple is able to show that, hey, their next 12-month sales and profitability looks better than expected, then that may offset some of the investor anxiety on rising rates, which tend to have a negative impact on valuations, especially for technology shares, which often have materially higher multiples than other stocks in the market.

MacDailyNews Note: Apple reports Q122 results on January 27th. Analysts’ consensus expects the company to earn $1.88 a share on all-time quarterly revenue of $118.38 billion.

We’ll have Apple’s results for you as soon as they are released, just check our homepage right around 1:30 p.m. PT / 4:30 p.m. ET on January 27th. We will follow that with live notes from Apple’s’ conference call starting at 2:00 p.m. PT / 5:00 p.m. ET on the 27th.

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5 Comments

  1. While revenue will signal overall sales, make investors happy and will give a glimpse into supply chain issues, for the stock itself the gross margin and ultimate net income(net profit) are important too. GP was around 39% previous Q1. 40% would be seen as a home run, closer to 38% would be considered concerning. On net income(net profit), Apple has never had a 30 billion dollar net profit in a single quarter (there probably hasn’t been any American company that has). This is the bullish mark, 30 Billion. As odd as it may seem given the huge number, under 29 billion may be considered concerning.

    1. I’m not as concerned about gross. Apple has been down to 38% before. As we all should know, because Apple has stated this time and time again, gross depends on new product introductions and R&D expenses. The more new production introduced and how major they are brings down the gross by differing amounts.

      The main brake on Apple’s stock price has been the lack of forward guidance. Usually, when a company forgoes that, it’s because there are problems they don’t want to discuss in the open. Apple has shown that that’s not true for them, but some analysts still get twisted by it.

      Yes, the question of supply line issues are important here, and Apple has been very open about it. Surprisingly enough, they gave us actual numbers and said it could be worse in this, their biggest quarter of the year. That wouldnt be surprising, as bigger sales would expect,y result in more backlog for any reason, and that what always happens. But apples customers are far more likely to wait it out than say, Hp or Dell customers. So that could already be a discount to the stock, and may not matter as much today.

  2. Apple has lacked proper inventory to meet demand for almost every holiday season since Tim became the CEO. It pains me as an investor to see all these customers in an Apple store, and they have almost nothing to sell them. This failure is really unacceptable, for a company that has enough money to hire more workers, diversify manufacturing and plan earlier. The major ski count is likely under 30, so to not be able to buy a product is unacceptable for Tim to allow on his watch.

    1. It didn’t change with Tim, this has been a reoccurring problem going well back. When I bought my first personal Mac end of 1992, the Quadra 950, it was back ordered by six weeks. Other equipment I’ve bought has also been back ordered. If anything, the situation had improved under Cook. But Apple is a vastly bigger company today, and only the very largest of suppliers can suffice to provide Apple with the numbers they need.

      Shortages these days are affecting everything, and are the main reason for the inflation we’re seeing right now. Apple has been affected too, but to a lesser extent than many other companies.

      1. Ok, so now it’s after the quarterly report, and we can see just how well Apple did, even with supply constraints. They said that the March quarter will be constrained, but less so. That’s a good sign looking forward.

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