Apple Inc (NASDAQ: AAPL) stock rose over 1.2% on 29th April, 2021 (as of 09:43:07 UTC-4 · USD; Source: Google finance) after the company posted better than expected results for the second quarter of FY 21 fueled by 5G iPhone upgrades but warned a global chip shortage could dent iPads and Mac sales by several billion dollars.
The world’s largest technology company has mostly thrived during the pandemic. Supply chains were thrown off kilter early on last year, however, millions of people were forced to work and study from home, firing up demand for iPhones, iPads and Mac computers. Now that vaccinations are spreading and some consumers are returning to the office and school, Apple will have to work hard to maintain such high level of interest in its devices. Apple did not provide a forecast for the current quarter.
Meanwhile, the iPhone 12 went on sale during the holiday quarter, but sales of the smaller iPhone 12 mini and pricier iPhone 12 Pro Max didn’t kick off until November. That means the fiscal second quarter was the first full financial period for this new line of 5G handsets. Apple also rolled out new MacBook Pros, a Mac mini, MacBook Airs, new AirPods, new iPads and updated Apple Watches.
AAPL in the second quarter of FY 21 has reported the adjusted earnings per share of $1.40, beating the analysts’ estimates for the adjusted earnings per share of 99 cents, according to Refinitiv data. The company had reported the adjusted revenue growth of 54 percent to $89.6 billion in the second quarter of FY 21, beating the analysts’ estimates for revenue of $77.4 billion. Apple reported iPad revenue of $7.8 billion, topping Wall Street expectations of $5.65 billion. It also sold a record $9.1 billion worth of Macs, beating estimates of $6.8 billion. The company will start shipping new iPad Pro models and a revamped iMac with its own chip later in May, potentially propelling both lines in the current quarter.
Additionally, the company has declared a cash dividend of $0.22 per share of the Company’s common stock, an increase of 7 percent. The dividend is payable on May 13, 2021 to shareholders of record as of the close of business on May 10, 2021. The company has also authorized an increase of $90 billion to the existing share repurchase program.
In the fiscal third quarter, the chip shortage could cost the company $3 billion to $4 billion in revenue. The third quarter is expected to grow by “strong double digits” year over year but a steeper-than-usual decline in revenue between its fiscal second and third quarters because of a later iPhone 12 launch.