Apple shares swing to a loss after executives warn of billions in additional costs 2022-04-28 15:40:00

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Apple Inc. has overtaken Earnings forecast and set a new record for March quarter revenue to start 2022, but executives expect to see greater pressures and billions of additional costs from challenges in the current period, sending stocks lower in after-hours trading.

CFO Luca Maestri said on a conference call regarding Apple
AAPL,
+ 4.52%

Thursday earnings report.

The company expects it will see $4 to $8 billion in negative impacts related to the restrictions in the June quarter, which Maestri added is “much larger” than what Apple saw during the March quarter.

Tim Cook, CEO of Apple, noted that while Apple took some of the sting out due to the lack of silicon in the March period, it is now facing new challenges caused by temporary factory closures in China related to the outbreak of the Corona virus. He expects the pressures to affect “most product categories”, although some factories are now reopening.

Shares are down 3% in after-hours trading after having originally moved higher on strong results. Apple beat expectations in terms of profits and revenue thanks to particular strength in the iPhone and Mac segments.

The company reported second-quarter net income of $25 billion, or $1.52 per share, up from $23.6 billion, or $1.40 per share, in the prior quarter last year. Analysts tracked by FactSet were expecting $1.42 in earnings per share. Apple’s revenue rose to $97.3 billion from $89.6 billion, while analysts had expected $94.0 billion.

Apple generated $50.6 billion in revenue from its iPhone business, up from $47.9 billion a year ago and before the FactSet consensus, which was $48.4 billion.

The company saw $7.6 billion in iPad revenue, down from $7.8 billion a year earlier, as well as $10.4 billion in Mac revenue, up from $9.1 billion. FactSet’s consensus was on revenue of $7.2 billion from iPads and $9.1 billion from Macs.

Cook noted that Apple “continues to see such strong demand for [the] iPad even while exceeding the significant supply constraints we expected at the start of the quarter.”

The wearables, home, and accessories category from Apple brought in $8.8 billion in revenue, compared to $7.8 billion a year earlier, while analysts were looking for $8.9 billion.

The company’s services business added $19.8 billion, compared to $16.9 billion a year earlier. The consensus of FactSet was $19.7 billion.

Apple executives along with their latest results announced that they are adding $90 billion to share repurchase permission, with quarterly earnings increasing 5% to 23 cents a share. Dividends will be paid on May 12 to shareholders of record as of the close of business on May 9.

apple It usually provides updates On capital return plans with the March quarter report, it has proceeded to net cash neutral over time. When asked if Apple would consider making a big acquisition rather than just pulling its cash balance through dividends and buybacks, Cook replied that Apple would “only acquire something strategic” but the company is “always looking”.

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