Following Apple’s record second quarter earnings report on Thursday, Piper Sandler analyst Harsh Kumar said the issues with Apple are “transitory” and its “fundamentals seem to be headed in the right direction.”
Apple executives warned that supply constraints would cause a hit of $4 billion to $8 billion in its fiscal third quarter. Apple Chief Financial Officer Luca Maestri also said COVID-related shutdowns were having some impact on customer demand in China.
Harsh Kumar, an analyst with Piper Sandler, said Apple’s guidance “may be considered a disappointment for all the wrong reasons.” Kumar said the issues with Apple are “transitory” and its “fundamentals seem to be headed in the right direction, but the short-term transitory impacts” were distorting the guidance.
Evercore ISI’s Amit Daryanani noted there were several issues to consider that could mute Apple’s top-line growth in the June quarter. In addition to Covid-related supply constraints, he also pointed to the war in Ukraine and headwinds from foreign exchange.
But Daryanani said given Apple’s comments that much of the supply issues have been resolved, “we expect some of these revenues to come back as they likely create more pent-up demand” for Apple.
MacDailyNews Take: While $4 billion to $8 billion is not an insignificant amount, for some perspective: in what is historically its weakest quarter, Apple generated all-time quarterly revenue of $97.3 billion or more than Citigroup is worth. In 90 days.
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Frustrating how quick and negative Wall Street is to any negative news surrounding while slow and indifferent to positive news. Not a big Tim Cook fan, yet appreciate his understanding of supply chains. Work arounds and fixes in supply chains are where he shines. Wall Street, get a grip.
“fundamentals seem to be headed in the right direction.” Seem???
Seriously?! Record quarter generating over $97B, a mountain of cash, buying back stock and increased dividends. And this compares to what other company? Even with a “possible” $4-$8B reduction in meeting demand, the reaction, as usual is way overblown. Oh well, my money is on Apple and as long as it’s on sale, I’ll keep acquiring it on the cheap and so will Apple, Warren and most smart investors. Unfortunately, I just don’t have and extra $90B to keep up with Apple. haha