Apple (NASDAQ:AAPL) share price slips despite smashing estimates

An estimate-beating quarter fails to push Apple shares higher.

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The Apple Inc (NASDAQ: AAPL) share price moved to the downside overnight despite the company reporting another quarter of solid growth.

Shares in the US tech giant slipped in the session leading up to Apple’s third-quarter results. The Apple share price proceeded to move lower after-hours following the release of its results after the market closed.

Let’s inspect the numbers that failed to enthuse investors.

Growth across all major product lines

Although Apple’s results for Q3 may not have impressed investors, it did beat analysts’ estimates. On the top line, total revenue came to US$81.41 billion compared to estimates of US$73.30 billion. This represented an increase of 36% year-over-year (YoY).

Meanwhile, net income totalled US$21.74 billion, equating to earnings per share of US$1.31 per share. Analysts were expecting US$1.01.

Breaking down Apple’s sales by category, iPhone sales increased 49.7% YoY to US$39.57 billion. Similarly, services revenue surged 33% to US$17.48 billion. Other products, Mac, and iPad sales came to US$8.76 billion, US$8.24 billion, and US$7.37 billion respectively.

In fact, all major product lines delivered double-digit growth. Much of this growth came from sales in China. According to the release, Apple notched up US$14.76 billion in sales from China – representing an increase of 58.2% on the prior corresponding period.

Commenting on the result, Chief Financial Officer Luca Maestri said:

Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices. We generated $21 billion of operating cash flow, returned nearly $29 billion to our shareholders during the quarter, and continued to make significant investments across our business to support our long-term growth plans.

Chip shortage weighs on Apple share price

While the results were a major positive for the tech company, concerns surrounding the ongoing computer chip shortage appear to have investors on edge.

During the earnings call, CEO Tim Cook signalled Apple is seeing supply constraints that could impact iPhone and iPad sales in the September quarter.

Additionally, the shortage affected Mac and iPad numbers during the third quarter. However, Cook said the company was able to mitigate some of the impacts.

Lastly, Apple once again did not provide guidance, potentially putting further pressure on the Apple share price.

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Motley Fool contributor Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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