Apple posts bumper sales growth, but component shortages set to impact on Q3

Apple soundly beat earnings estimates on the Street on the back of bumper sales of its iconic iPhones, but put a damper on things by guiding lower for the next quarter.

Third quarter revenues surged by 36% to $81.4bn, beating the analyst consensus by a wide margin as iPhone sales vaulted higher by roughly half.

Mac sales were 16% stronger alongside at $8.24bn, while those of iPads increased by 12% to reach $7.37bn and those of services grew 32.9% to $17.5bn.

The technology manufacturer however also said that component shortages would hit sales of its iPhones and iPads in the current quarter - although it still expected a "strong" double-digit turnout.

The Wearables, Home and Accessories segment saw revenues increase 36% to $8.78bn.

Net income meanwhile jumped 93% to reach $21.74bn, for adjusted earnings per share of $1.30 (consensus: $1.01).

Apple's free cash flow meanwhile strengthened from $54.6bn in the year ago quarter to $76.0bn.

Yet its net debt was also up significantly, from $60.1bn at the end of 2020 to $76.0bn, Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown pointed out.

"The problem with being the best is you risk becoming a victim of your own success. That’s what we’ve seen from the reaction to Apple’s results, where despite an exceptional performance, the market’s response has been somewhat muted," Lund-Yates said.

"The growth might be slower than last quarter, but you only have to look at the figures to appreciate Apple’s hardly in any trouble, quarterly revenues of over $81bn would put most businesses on the planet to shame."

As of 1256 BST, shares of Apple were dipping 1.12% to $145.13.