Apple Inc. slipped as much as 2.9% in late trading after warning that sales growth may be slowing and supplies are getting tight, putting a damper on investor excitement following a record-setting third quarter.
The company said on a conference call Tuesday that supply constraints will affect the iPhone and iPad in the current quarter. Decelerating demand for services also will drive the slowdown. Apple declined to provide specific revenue forecasts, a practice it adopted during the pandemic.
The cautious remarks followed a sales gain of 36% in the third quarter, with revenue of $81.4 billion shattering Wall Street’s $73.8 billion estimate. But investors are sticking to a wait-and-see attitude. The parts shortages and a patchwork of Covid restrictions will continue to weigh on Apple’s business this year.
Eoin Treacy's view
It’s not that surprising that companies are coming through with lower sales forecasts. It was never going to be possible to sustain the pace of sales growth in non-single use items. People do not buy new phones or computers every quarter. The question for investors is at what level sales will settle as we come out of the worst of the pandemic.
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