Apple Sales Soar due to Strong iPhone Demand, but Chip Shortages Underway

Apple has posted sales and profits ahead of analyst forecasts - a boost further fueled by 5G iPhone upgrades, but has issued a warning with regard to a global chip shortage that could hurt iPad and Mac sales by several billion dollars.

Fiscal Q2 to China nearly doubled and results topped analyst targets in every category, led by $6.5 billion more in iPhone sales than predicted and Mac sales about a third higher than estimates.

The tech giant has additionally announced a $90 billion share buyback, just a day after Alphabet communicated their intention to repurchase $50 billion worth of stock.

Although Apple avoided a chip shortage in Q2 by burning through supply buffers, according to the company’s Chief Financial Officer - Luca Maestri, in Q3, the shortage could cost the company $3-$4 billion in revenue.

The shortfalls "affect primarily the iPad and the Mac," Tim Cook further commented. The CEO said Apple competes against other industries for chipmaking capacity and "it's very, very difficult" to predicted when shortages will end.

Maestri, in turn, added that he expects revenue for the quarter ending in June to grow by "strong double digits" year over year, but a steeper-than-usual decline in revenue between Q2 and Q3 is expected because of a later iPhone 12 launch.

Apple raised its dividend 7% to 22 cents per share, as well as said that iPhone sales were $47.9 billion compared with analyst estimates of $41.4 billion. Sales of Macs and iPads were $9.1 billion and $7.8 billion, respectively, compared with estimates of $6.8 billion and $5.6 billion, respectively.

All in all, the tech company’s shares are up around 93% over the past year, compared with a 61% rise for the Nasdaq 100 index as whole, of which Apple is part.

*The products advertised are only available to clients under Fondex Limited (SDL No: SD037). Trading CFDs involves significant risk of loss.