Even Amazon and Apple are grappling with the global supply chain crunch.
On Thursday, both Amazon and Apple reported that their revenue results fell short of Wall Street analysts’ expectations and they even earned that in the December quarter, their supply chain issues could weigh on business.
For the three months that ended on 30th September, Amazon missed Wall Street projections for sales and profit, it was a very rare miss for such internet giants like Amazon. They posted that net sales were $110.8 billion which is 15% up from what they were a year ago, from the same period. Net income for the quarter fell short of analysts’ expectations of $4.6 billion, falling to $3.2 billion from $3.6 billion the year before.
In a statement, Andy Jassy, who is the CEO of Amazon, warned that the company’s consumer business will incur several billion dollars in additional costs in the fourth quarter. Those costs, he said, come “as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs — all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season.”
Apple’s quarterly revenue was $83.4 billion, which was slightly lower than analysts had predicted. iPhone sales also fell short of analyst expectations, coming in at $38.9 billion.
After the results were announced, CEO Tim Cook held a conference call with analysts, emphasizing how, despite supply constraints, Apple was able to set a quarterly sales record. “Demand was very robust,” he said, but “larger-than-expected supply constraints,” including silicon shortages and a “related manufacturing disruption,” cost the company $6 billion.
In after-hours trading on Thursday, Amazon’s (AMZN) stock dropped as much as 5%, while Apple’s (AAPL) stock dropped more than 4%.
The pandemic’s supply chain disruptions and staffing issues have gotten worse in recent months, affecting a wide range of industries. Several retailers, manufacturers, and economists have warned that global supply chain constraints will result in not only lower holiday discounts this year, but also a possible shortage of products on store shelves.