Tech giant Apple is predicting a slump in performance for its fiscal Q3, 2022 term ending in June even as the company showcased better results, on a yearly basis, during the second quarter.
Apple said its forecast is based on persistent global supply chain disruptions.
“We believe our year-over-year revenue performance during the June quarter will be impacted by a number of factors. Supply constraints caused by COVID-related disruptions and industrywide silicon shortages are impacting our ability to meet customer demand for our products,” Luca Maestri, chief financial officer at Apple, said during the April 28 earnings call detailing the company’s Q2 results.
“We expect these constraints to be in the range of $4 billion to $8 billion, which is substantially larger than what we experienced during the March quarter. The COVID-related disruptions are also having some impact on customer demand in China.”
Apple CEO Tim Cook explained that much of the supply constraints are “primarily centered” around the Shanghai corridor, and the constraints are applicable to “most of the product categories.”
Many of the affected final assembly factories have currently restarted operations.
With regard to foreign exchange, Apple is expecting a headwind of almost 300 basis points on the company’s year-on-year growth rate. In addition, a 150 basis point impact is also expected due to pausing sales in Russia during the March quarter. Services are predicted to continue growing at a double-digit rate.
Apple’s financial results for the fiscal 2022 second quarter ending March 26 had shown positive growth. Revenue during the period was at $97.3 billion, up 9 percent from the same period last year. Quarterly earnings per diluted share were $1.52.
A cash dividend of $0.23 per share of the company’s common stock has been announced, a rise of 5 percent. The company board has also authorized a $90 billion increase to the existing share repurchase program.
Global phone sales revenue was at $50.6 billion, a record for the March quarter and a year-on-year growth of 5 percent. iPad revenue fell 2 percent. Revenue from wearables, home, and accessories rose by 12 percent to reach a March quarter record of $8.8 billion.
The company’s services business hit an all-time revenue record of $19.8 billion, up 17 percent. Paid subscriptions from all its platforms reached 825 million, an increase of over 165 million during the last 12 months.
“Continued strong customer demand for our products helped us achieve an all-time high for our installed base of active devices,” Maestri said in an April 28 press release. “Our strong operating performance generated over $28 billion in operating cash flow, and allowed us to return nearly $27 billion to our shareholders during the quarter.”