What's Up With Apple: Record Revenue Still Not Good Enough, and More

When Apple Inc. (NASDAQ: AAPL) reported fiscal fourth-quarter results after markets closed Thursday, the company said revenue for the quarter totaled $83.4 billion, a record high for the September quarter. Because the consensus analysts’ estimate for quarterly revenue was $89.4 billion, the stock pulled back as much as 5% during after-hours trading, and it was down about 3.7% in Thursday’s premarket session.

CEO Tim Cook explained what happened to CNBC: “We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion.” The worse news is that Cook also said the company expects supply chain issues to take a bigger slice out of Apple’s revenue in the December quarter.

On the company’s conference call to talk about the fourth-quarter results, Cook was asked about the challenges Apple faces for its tight control of the App Store. MacRumors has the quote:

The main thing we’re focused on in the App Store is keeping our focus on privacy and security. These are the two major tenets that have produced a very trusted environment where consumers and developers come together. Consumers can trust the developers and the apps are who they say they are. Developers get a huge audience to sell their software to.

That’s sort of number one on our list. Everything else is a distant second. What we’re doing is working to explain the decisions that we’ve made that are key to keeping our privacy and security. Not having sideloading and alternate ways on the iPhone where we’re opening up the iPhone to unreviewed apps that get by the privacy restrictions we put on the App Store.

iPhone sales totaled $38.9 billion during the quarter, 46.6% of Apple’s total revenue and up 47% year over year. Mac sales rose 1.6% to $9.18 billion, iPad sales rose 21.4%, and services revenue rose by 25.6% to $18.28 billion. Sales in the company’s wearables, home and accessories segment rose 11.5% to $8.8 billion.

For full fiscal 2021, which ended in September, Apple repurchased $85.97 billion worth of its common stock and paid dividends totaling $14.47 billion.

Briefly noted:

Apple was not the only giant tech company to report disappointing quarterly results late Thursday. Inc. (NASDAQ: AMZN) missed consensus estimates for both earnings per share and revenue. The company blamed higher labor costs, saying that it estimates that the cost of labor, labor-related productivity losses and cost inflation have added approximately $2 billion in operating costs in the quarter. Amazon said those costs would nearly double in the December quarter. Amazon stock traded down about 4.7% in Friday’s premarket.

Combined, Apple and Amazon could see as much as $200 billion shaved from their market value today. Any combination of an Apple share price decline and a Microsoft Corp. (NASDAQ: MSFT) share price increase that totals around 3.5% would see Microsoft supplant Apple as the most valuable company in the country. Microsoft stock traded down about 0.2% early Friday.

Effective Thursday, the FAANGs became the MAANGs. That change is the result of Facebook’s name change to Meta Platforms Inc. The freshly renamed company’s Nasdaq stock ticker will change to MVRS on December 1. Meta will operate in two reporting segments: Family of Apps includes Facebook, Instagram, Messenger, WhatsApp and other services, and Reality Labs includes augmented and virtual reality hardware, software and content.

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