Apple Inc AAPL is tapering down future earnings expectations as it comes face-to-face with the ongoing global semiconductors shortage.
What Happened: The iPhone maker forecast double-digit growth for the current fourth quarter but said the number would be below the 36.4% growth seen in the third quarter.
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The slowdown will also touch the Tim Cook-led company’s services business, Apple executives said in the Q3 earnings call.
Cook said at the call that the affected chips are made with older technology but are still required in the production of the iPhone.
“We do have some shortages,” the Apple CEO said that the demand has been so great and so beyond the tech giant’s expectation “that it's difficult to get the entire set of parts within the lead times that we try to get those."
Apple shares fell 2.09% in the after-hours trading on Tuesday to $143.70 after closing the regular session nearly 1.5% lower at $146.77.
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Why It Matters: Apple reported Q3 earnings per share of $1.30 on Tuesday beating the analyst-expected $1 figure. Revenues came in at $81.4 billion in the quarter, a 36% year-over-year increase and beat expectations of $72.93 billion.
CFRA Research analyst Angelo Zino noted that Apple could be stockpiling chips for upcoming iPhones but at the cost of the current models, reported Reuters.
“Apple will want as many chips as it can get its hands on,” said the analyst. “But when you couple that with the existing supply constraints, Apple is likely going to have a more difficult time meeting demand this year."
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