Why does Apple temper sales expectations for current quarter

Street Outsider wrote a column · Jul 28, 2021 10:50

Wall Street expects $Apple (AAPL.US)$to close its fiscal year in September with record iPhone revenue of nearly $187 billion.

Source: Apple

But a funny thing has happened over the past few years: The iPhone has also become a notably smaller part of Apple’s business.

Why does Apple temper sales expectations for current quarter

The big question is whether the supporting acts can keep stepping up.

Overall, the company cited three reasons for the outlook:

A less favorable foreign-exchange benefit.

Slower growth in its services category, which benefited in the June quarter from favorable comparisons as certain services were hurt by the pandemic a year ago.

The company’s expectations that supply constraints during the September quarter will be greater than it experienced during the June quarter, particularly for the iPhone and iPad.

Chief Financial Officer Luca Maestri said on Tuesday’s conference call that the company expects supply constraints to worsen in the September quarter relative to June, mostly affecting the iPhone and iPad.

Still, Mr. Maestri projected the company will deliver “very strong double-digit” revenue growth for its fiscal fourth quarter.

Apple stock price soared 82% in 2020 and continued to rise 11% year to date.