Episode summary
Instant Reaction: Apple Slides After Supply Shortages Hurt Its Sales Forecast | Bloomberg...
Bloomberg Intelligence
· · 10 min · Hosts: Paul Sweeney, Carol Massar, Tim Stenovec · Guests: Ed Ludlow, Anurag Rana, Mark Gurman
Summary
Apple’s June quarter came in ahead of expectations on the top line and bottom line, with revenue at 109.42 billion and EPS at $2.2 a share versus Street estimates of 108.85 billion and $1.89. iPhone revenue of 54.25 billion also beat forecasts, and Mac was described as especially strong. The host and guests said gross margin held up better than expected, helped in part by tariff refunds, which added about 2 percentage points and gave EPS an 11-cent benefit.
The weaker points were services, iPad, and Greater China. Services revenue came in a bit light at 30.74 billion, Greater China missed expectations at 8.82 billion, and the discussion centered on whether China softness and supply constraints were enough to explain the postmarket selloff. The guests argued the market may be focusing too much on the misses, since the overall quarter was solid and Apple’s share price had already run up sharply this year.
Looking ahead, the conversation shifted to Apple’s longer-term product roadmap. The guests said memory shortages could pressure costs, that comparisons get harder next year, and that Apple’s next growth engines may come from wearables, glasses, and eventually AI devices rather than a near-term replacement for the iPhone.
Key takeaways
- Apple beat consensus on revenue, EPS, iPhone revenue, and products revenue, but the stock still fell about 2.4% in after-hours trading.
- Services and Greater China were the main soft spots, with services at 30.74 billion and China at 8.82 billion coming in below estimates.
- A guest said gross margin was better than expected partly because tariff refunds added about 2 percentage points, boosting EPS by 11 cents.
- The guests said memory shortages could become a bigger issue next year as comparisons get tougher and costs rise.
- Mark Gurman argued Apple’s longer-term growth story is shifting toward glasses and other AI devices, not a replacement for the iPhone anytime soon.
Notable quotes
“Third quarter revenue, again, better than what the street was forecasting. 109.42 billion versus 108.85 billion”
“Third quarter EPS $22 a share. That is definitely above what the street was forecasting of $1.89 a share”
“iPhone revenue coming in above estimates at 54.25 billion”
“there was roughly 2 percentage points benefit gross margin from tariff refunds”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world
Covering Apple. Punam Goyle with us from Bloomberg Intelligence. Honor Grana as well and Ed Llo host of Bloomberg Tech.
So, let's get to the numbers. Um thirdarter revenue 109.42 billion. That's a beat.
108.85 is what the street was expecting. Third quarter EPS $22 a share. That is definitely above what the street was forecasting of $1.89 a share.
If we go to third quarter um products revenue 78.68 billion that too was better than the street estimate of 77.25 billion. Services revenue 30.74 billion. a little bit light, 31.36 billion.
And uh again, we're kind of highlighting here on the Bloomberg what we call our red sticky, our red headlines. Third quarter revenue, again, better than what the street was forecasting. 109.42 billion versus 108.85 billion.
We're now getting iPhone revenue as well, Tim.
Yeah, the headlines crossing fast and furious. iPhone revenue coming in above estimates at 54.25 billion. The estimates for 53.6 billion.
Shares Apple down about 2.4% 4% in the after hours. Apple also declaring a cash dividend of $27 a share. Third quarter greater of China revenue coming in shy of estimates at $8.82 billion.
The estimate was for $19.58 billion. Uh Apple shares falling about 2.4% in the post market. When these numbers crossed, they did shoot higher ever so slightly.
You know, watch the after hours uh carefully uh and with caution. We haven't heard yet what they're going to say on the call. Very light commentary too as Apple is want to do in uh their press release just saying that the company's proud to report the strongest June quarter ever with double digit revenue growth across iPhone, Mac, and services and in every geographic segment.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- apple sales forecast
- supply shortages
- earnings reaction
- tech supply chain constraints
- analyst estimate revisions
Companies and tickers mentioned
- AAPL
- Apple
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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