FILE PHOTO: The Apple Inc logo is shown outside the company’s 2016 Worldwide Developers Conference in San Francisco, California, U.S. on June 13, 2016. REUTERS/Stephen Lam
Apple Inc on Wednesday posted sales and profits ahead of Wall Street expectations fueled by 5G iPhone upgrades but warned a global chip shortage could dent iPads and Mac sales by several billion dollars.
Fiscal second-quarter sales to China nearly doubled and results topped analyst targets in every category, led by $6.5 billion more in iPhone sales than predicted and Mac sales about a third higher than estimates.
Apple also announced a $90 billion share buyback, a day after Alphabet Inc promised to repurchase $50 billion in stock.
Apple Chief Executive Tim Cook said on an investor call that Apple avoided a chip shortage in the fiscal second quarter by burning through supply buffers.
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In the fiscal third quarter, the shortage could cost the company $3 billion to $4 billion in revenue, said Chief Financial Officer Luca Maestri.
The shortfalls “affect primarily the iPad and the Mac,” Cook said. “We’ll have some challenges in there,” Cook said, later adding that there could be trouble sourcing semiconductors made with older chipmaking technology. Those are the same class of older-technology chips bedeviling Ford Motor Co, which on Wednesday said the shortage slashed production in half in its second quarter.
