Apple has announced its financial results for the fiscal 2021 fourth-quarter ending September. Although the tech giant reported record revenue of $83.4 billion, it ultimately failed to meet Wall Street expectations.
For the period commencing from July until September 25, analysts expected revenue of $84.85 billion. Still, the earnings figure increased by 29 percent compared to the same period in 2020 ($64.7 billion), making it Apple’s best-performing fiscal fourth quarter, driven largely by strong demand for iPhones.
Additionally, Apple reported a profit of $20.5 billion, a considerable leap from the $12.67 billion in profit it generated during the same quarter last year.
This quarter represents the first time since April 2016 that Apple has failed to exceed earnings predictions. It’s also the first time since May 2017 that Apple’s revenues have fallen short of matching analyst estimates.
“We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” Apple CEO Tim Cook said.
Cook attributed the loss of potential earnings to ongoing supply constraints primarily caused by industry-wide chip shortages. He also mentioned COVID-related manufacturing disruptions in Southeast Asia affecting the company’s bottom line as well. However, each of Apple’s product divisions experienced growth on an annual basis in terms of revenue.
iPhone: $38.87 billion, up 47% year-over-year
Services: $18.28 billion, up 25.6% year-over-year
Other Products: $8.79 billion, up 11.5% year-over-year
Mac: $9.18 billion, up 1.6% year-over-year
iPad: $8.25 billion, up 21.4% year-over-year
While Apple’s flagship smartphone category grew by nearly 50 percent, it still fell short of Wall Street estimates. Looking forward, Cook expects “solid year-over-year revenue growth” in the December quarter even though he anticipates Apple will encounter worse supply constraints, higher than the $6 billion shortfall in revenue.
“So we’ve finished about a month of the quarter. The Covid related manufacturing disruptions have improved greatly. The chip shortages linger on,” Cook added. He highlighted that the supply issues were associated with chips on “legacy nodes,” or older chips.
Nevertheless, Apple said that its December quarter would deliver the largest revenue report in the firm’s history. Overall, Apple’s annual revenue for fiscal 2021 jumped 33 percent from 2020 to a staggering $366 billion.
One category supply problems will impact, though, is the iPad, Apple CFO Luca Maestri said. They predict a year-over-year sales decline in the December quarter for its tablet, but the company was more optimistic in regards to other products.
Apple’s fourth-quarter covers just a few days of iPhone 13 sales, so they’re pinning their hopes on surging demand for new iPhone 13 models in the upcoming quarter to provide the bulk of its revenue.