Apple Drops 3.5% as Q4 Revenues Disappoint, Supply Crunch Hurts

Apple Inc. (AAPL) has posted lower-than-expected fiscal fourth-quarter 2021 revenues (ended September 25), impacted by supply constraints due to chip shortages and COVID-19 to some extent. Following the news, shares of the tech giant tumbled 3.5% in the extended trading session on Thursday.

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While the quarterly revenues of $83.4 billion missed analysts’ expectations of $84.85 billion, they jumped 29% year-over-year. This increase reflected robust performance in all geographic segments (Americas, Europe, Greater China, Japan, and the Rest of Asia Pacific) and product categories, even though there was uncertainty in the macro-environment.

Apple posted earnings per share of $1.24 in the quarter, which was in line with the Street’s estimate. It recorded earnings of $0.73 per share in the same quarter last year. Notably, Services and Mac revenue reached new all-time highs during the quarter.

Services revenue came in at $18.3 billion, up 26.2% year-over-year, while Mac revenue grew 2.2% to $9.2 billion. Additionally, iPhone sales of $38.9 billion surged 47.3% from the same quarter last year. (See Apple stock charts on TipRanks)

Also, iPad revenues jumped 22%, while wearables, home and accessories recorded 11.4% growth in the quarter.

The CEO of Apple, Tim Cook, said, “This year we launched our most powerful products ever, from M1-powered Macs to an iPhone 13 lineup that is setting a new standard for performance and empowering our customers to create and connect in new ways.”

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Looking ahead, the company warned that iPhone and other product production are continually being hampered due to supply-chain disruptions and are likely to face more challenges during the coming holiday season.

Apple’s board of directors announced a quarterly cash dividend of $0.22 per share of the company’s common stock. The dividend will be paid on November 11 to shareholders of record as of November 8. The company’s annual dividend of $0.88 per share reflects a dividend yield of 0.58%.

During the September quarter, the company returned over $24 billion to shareholders.

For 2021, earnings came in at $5.61 per share, up 71% from last year, while net sales stood at $365.8 billion, up 33%.

Wall Street’s Take

Following the fourth-quarter results, Wedbush analyst Daniel Ives reiterated a Buy rating on the stock with a price target of $185 (21.26% upside potential).

Ives commented, “Every other product category with Services front and center came in ahead of our expectations, but ultimately it was supply chain that crashed the iPhone 13 party this quarter and will be an overhang into the December quarter but we view this as transitory and in no way impacts our long term bullish view as AAPL is heading to a $3 trillion market cap in 2022.”

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 16 Buys and 6 Holds. The average Apple price target of $169.75 implies 11.26% upside potential to current levels. Shares have jumped 32.3% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Apple’s performance. According to the tool, the Apple website recorded an 8.06% monthly growth, year-over-year, in global visits in September. Additionally, year-to-date website growth, compared to year-to-date website growth in the previous year, came in at 23.96%.