Apple sees supply issues despite upbeat results

STORY: Apple gave a warning Thursday that it could take a hit of up to $8 billion dollars in sales because of supply chain bottlenecks in this quarter.

Shares took a dip after executives laid out their gloomy outlook on a conference call, down more than two percent in late trade.

The news outweighed happier news of a strong start to the year for Apple – where it saw record profit and sales from January to March.

Now - Apple CFO Luca Maestri has warned in an interview that COVID-19 lockdowns across China have affected production, especially in a corridor in Shanghai and that the war in Ukraine is denting sales and growth is slowing in services two areas the iPhone maker sees as its engine for expansion.

Maestri says the Ukraine crisis - which led Apple to stop sales in Russia, would cut sales more deeply in the fiscal third quarter.

CEO Tim Cook said that almost all of the Chinese factories doing final assembly of Apple products had restarted after recent COVID shutdowns, but the company is not forecasting when the chips shortage, mostly affecting older products would end.

Cook also said he hoped COVID issues would be "transitory" and "get better over time."

Apple's overall fiscal second-quarter revenue was 97.3 billion dollars, up 8.6% from last year and higher than analysts' average estimate according to Reuters data.

The company also said it now has 825 million paying subscribers across its at least seven subscription offerings - like Apple Music and TV+ up by 40 million from the quarter before, growth its reporting as rivals like Netflix report subscriber losses.