Munster Says '​​Perceived Miss' Drove Down Apple Shares, Expects Growth In Mid-Teens In December Quarter

Former Piper Jaffray Apple Inc AAPL analyst Gene Munster said that despite supply headwinds, the iPhone maker could look forward to mid-teens growth in the December quarter.

What Happened: “Under the headline that the supply headwind will worsen in December, pushing demand into March, is the reality that Apple’s business and outlook are stronger than ever," the Loup Ventures co-founder wrote in a blog.

As per Munster, revenue will grow this quarter “despite what we believe is a $10B difficult comp around the timing of iPhone 13, along with an $8B supply headwind.”

For 2022, Munster expects Apple to grow “comfortably” ahead of Street estimates of 4%.

Apple shares declined nearly 3.5% to $147.19 in the after-hours session after closing 2.5% higher at $152.57.

Read Next: Josh Brown On What To Do If Apple Reports Disappointing Q4 Results

Why It Matters: The Cupertino, California-based tech giant reported fourth-quarter earnings per share of $1.24, which were in line with estimates. Revenue was reported at $83.4 billion, an increase of 29% year-over-year, which missed estimates of $84.55 billion.

Munster said that for the September quarter the Tim Cook-led company reported a $6 billion supply headwind, which is more than the $4 billion Loup had estimated.

Adjusting the incremental $2 billion headwind implies the September quarter would have slightly exceeded the Street’s $85 billion mark compared with the reported 2% underperformance, according to Munster. He noted this “perceived miss” is what likely drove down Apple’s shares in the after-hours trading.

Munster expects the supply impact to worsen in December pointing to Apple’s commentary surrounding holiday demand.

“This will result in a greater supply headwind compared to the $6B in the September quarter. Previously, we had expected a $6.0-$8.0B headwind, and now believe it will be around $8B.”

On the December outlook Loup expects a 5% year-over-year growth, which Munster called an "appropriate read" and places revenue at $116 billion, slightly below Street at $118 billion.

For December, Munster sees year-over-year growth despite the $10 billion comp headwind around the timing of iPhone 13 and the $8 billion supply headwind.

“If you normalize those two factors, the underlying growth is in the mid-teens,” he said.