This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Apple Says China Lockdowns Loom Over Sales
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Tech > Apple Says China Lockdowns Loom Over Sales
Tech

Apple Says China Lockdowns Loom Over Sales

Editorial Board Published April 28, 2022
Share
Apple Says China Lockdowns Loom Over Sales
SHARE

Apple Inc. AAPL -2.59% cautioned Thursday that the resurgence of Covid-19 in China threatens to hinder sales by as much as $8 billion in the current quarter—a setback after seeing supply-chain improvements during the first three months of the year.

Contents
Share Your ThoughtsHow the Biggest Companies Are Performing

The guidance from the iPhone maker came Thursday shortly after the company posted one of the best quarters in its 46-year history. The whipsaw of news sent the company’s stock on a jolting ride in aftermarket trading—first rising 2%, then falling more than 5%.

Many investors had expected a blowout January-through-March quarter and were more attuned to any indications from Chief Executive Tim Cook on his view of the future amid high inflation, pandemic lockdowns in China and the war in Ukraine.

“I want to acknowledge the challenges we are seeing from supply-chain disruptions driven by both Covid and silicon shortages to the devastation from the war in Ukraine,” Mr. Cook told investors. “We are not immune to these challenges.”

The new pain points for the Cupertino, Calif.-based company come as areas around Shanghai, where Apple has many suppliers, face government lockdowns aimed at curbing Covid-19 infections.

“Supply constraints caused by Covid-related disruptions and industrywide silicon shortages are impacting our ability to meet customer demand for our products,” Luca Maestri, Apple’s chief financial officer, said during a public conference call.

Mr. Maestri said the constraints will hurt revenue by $4 billion to $8 billion in the three months through June. The lockdowns are also expected to damp demand in China.

Apple’s new $1,599 monitor promises great screen quality, a sharp webcam and surround sound. But does it live up to its price tag? WSJ’s Joanna Stern compared it to other displays from LG, Samsung and Dell in her own March Monitor Madness. Photo illustration: Alex Kuzoian for The Wall Street Journal.

The challenges come after a blockbuster quarter. Apple’s revenue for the recent period rose 9% to $97.3 billion, far exceeding analyst expectations for $94 billion. Earnings per share rose to $1.52 from $1.40 a year earlier—beating estimates for $1.42 a share and setting a record for Apple’s fiscal second quarter.

The results reflected the company’s ability during that period to navigate supply-chain challenges that have been roiling the tech and auto industries, allowing the company to sell more iPhones than Wall Street expected. “The supply constraints were significantly lower than what we had experienced during the December quarter,” Mr. Cook said in an interview Thursday.

“Covid is difficult to predict,” Mr. Cook added during the conference call. He noted that “almost all of the affected final assembly factories have now restarted.”

Apple’s outlook added to a turbulent afternoon as investors worried about the overall economy. Amazon.com Inc. shares dropped more than 10% after the e-commerce giant posted its first quarterly loss since 2015 on slowing sales growth.

Apple’s results were in line with guidance from January, when the company predicted a record for the March period, though growing at a slower rate compared with the previous quarter—which included the Christmas holiday—when the company marked all-time revenue and profit highs thanks to the latest iPhones, Mac computers and iPad tablets.

The $97 billion quarter ranks as Apple’s third-best in history by total revenue, but one of its slowest for growth since the pandemic began more than two years ago. The company has seen double-digit year-over-year growth each quarter since the launch of the first iPhone with 5G capabilities in October 2020.

Daniel Morgan, a senior portfolio manager who focuses on technology at Synovus Trust Co., which counts Apple among its largest holdings, called supply-chain concerns, Covid-19 and inflation “the Street’s biggest worries” about the current quarter. Bernstein Research analyst Toni Sacconaghi echoed that sentiment in a note this week, predicting solid quarterly results and asking: “But then what?”

In January, Mr. Cook had said he expected the effects of supply-chain challenges to improve in the March period compared with the final three months of 2021, when Apple estimated it lost out on more than $6 billion in sales because of inventory constraints.

But his optimism came before the pandemic flared again in Asia and war erupted in Europe. Apple suppliers in China have been hit this month by stringent government lockdowns aimed at containing the spread of Covid-19. Loup Funds estimates that 85% of Apple’s products are assembled in China while the region accounts for almost 20% of the company’s annual sales.

In January, Mr. Maestri cautioned the March quarter would face an unusual year-earlier comparison. iPhone sales were more robust than normal in the 2021 comparable period because pandemic-related delays disrupted the typical fall launch and pushed back those sales. Overall sales a year earlier rose 54%.

Share Your Thoughts

How well is Apple positioned for long-term growth? Join the conversation below.

Sales of the iPhone rose 5% to $50.6 billion in the past quarter compared with a year earlier. Analysts had expected 1% growth. The company no longer discloses unit sales for the smartphone, which makes up about half of Apple’s annual revenue.

Those sales may have benefited from strong demand in China, where the latest iPhones have been resonating with consumers, analysts said. They have attributed some of an expected falloff in iPad sales to Apple giving priority to iPhone production during the period. Sales of the iPad dropped 2.1% to $7.6 billion. Mac computer sales rose 15% to $10.4 billion, far exceeding analysts expectations for flat results.

In Thursday’s interview, Mr. Cook said iPad’s results were hindered by “very significant supply constraints.”

Amid slowing device sales, digital content sales come back into focus. The so-called services segment, which includes iTunes and the App Store, grew 17% to $19.8 billion in the three months through March. Analysts had expected 17% growth.

How the Biggest Companies Are Performing

Write to Tim Higgins at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:Tech NewsWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Biden presses B aid package for Ukraine as Russia steps up bombardment in the east Biden presses $33B aid package for Ukraine as Russia steps up bombardment in the east
Next Article Biden Seeks New Aid for Ukraine as Russia Makes Slow Progress in Seizing East Biden Seeks New Aid for Ukraine as Russia Makes Slow Progress in Seizing East

Editor's Pick

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Studying Time: 3 minutes The View co-host Alyssa Farah Griffin is pregnant! On ‘The View,’ Alyssa Farah Griffin breaks the…

By Editorial Board 3 Min Read
Melissa Rycroft Admits to Actually “Struggling” in Wake of DUI Arrest
Melissa Rycroft Admits to Actually “Struggling” in Wake of DUI Arrest

Studying Time: 3 minutes Melissa Rycroft is in a darkish place proper…

4 Min Read
Man fatally shot throughout argument over lady at gathering at Tuscaloosa storage unit; suspect jailed
Man fatally shot throughout argument over lady at gathering at Tuscaloosa storage unit; suspect jailed

One individual was killed and a number of other others injured in…

2 Min Read

Oponion

U.S. panel revises childhood vaccine schedule for mixed MMRV shot – Nationwide

U.S. panel revises childhood vaccine schedule for mixed MMRV shot – Nationwide

U.S. vaccine advisers voted on Thursday to revise using certainly one of…

September 19, 2025

Farrah Abraham Trashes Catelynn Lowell & Tyler Baltierra

Studying Time: 3 minutes Farrah Abraham…

March 25, 2025

Richmond man convicted of sexually abusing three ladies

RICHMOND — A 41-year-old Richmond man…

September 13, 2025

EV Startup Lucid to Raise Vehicle Prices as Losses Narrow

Electric car maker Lucid Group Inc.…

May 5, 2022

Naomi Osaka is bringing Labubu to the US Open. There’s Althea Glitterson and Billie Jean Bling

NEW YORK (AP/HOWARD FENDRICH) — Naomi…

September 1, 2025

You Might Also Like

Enter the Fold With Our Favourite Folding Telephones
Tech

Enter the Fold With Our Favourite Folding Telephones

Different Folding Telephones to ContemplateSamsung Galaxy Z Flip7 {Photograph}: Julian ChokkattuSamsung Galaxy Z Flip7 for $1,100: Samsung's Galaxy Z Flip7…

7 Min Read
Apple Is Having a Banner 12 months—and Has the October Prime Day Offers to Match
Tech

Apple Is Having a Banner 12 months—and Has the October Prime Day Offers to Match

It has been a very good yr for Apple. The skinny, gentle iPhone Air was the largest redesign that the…

6 Min Read
I’ve Been Reviewing Laptops for a Decade. Here is What I would Purchase Throughout Prime Day
Tech

I’ve Been Reviewing Laptops for a Decade. Here is What I would Purchase Throughout Prime Day

Amazon's October Prime Day has arrived, and with it, a number of laptop computer offers to wade by way of.…

14 Min Read
If You are Searching for an Echo, This Is the One to Purchase This Prime Day
Tech

If You are Searching for an Echo, This Is the One to Purchase This Prime Day

There is no scarcity of Amazon Prime Day Echo offers taking place proper now. I've tried almost each single Echo…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?