Apple demolishes earnings expectations, but stock falls after iPhone chip supply warning

Apple reported strong fiscal third-quarter earnings on Tuesday, demolishing Wall Street expectations. Every one of Apple's major product lines grew over 12% on an annual basis.

Overall, Apple's sales were up 36% from the June quarter last year. iPhone sales increased nearly 50% on an annual basis.

Apple stock was down over 2% in extended trading. It dropped on Tuesday after Apple warned on its earnings call growth in the September quarter would not be as strong as June's.

Here are the key numbers compared to what Wall Street was expecting, per Refinitiv estimates:
• Other Products revenue: $8.76 billion vs. $7.80 billion estimated, up 40% year-over-year

Apple did not provide formal guidance for the sixth quarter in a row and has not since the beginning of the Covid-19 pandemic.

However, Apple CFO Luca Maestri said Apple expects double-digit, year-over-year growth in the current quarter. Maestri said that Apple expected less than 36% growth in the September quarter because of foreign exchange rates, less growth in its services business and supply constraints for iPhones and iPads.

Apple CEO Tim Cook said in a call with analysts that Apple is seeing supply constraints related to "silicon" (a common term for computer chips) that would affect the company's iPhone and iPad sales in the September quarter.

Apple also had a strong quarter in its Greater China region, which includes Taiwan and Hong Kong in addition to the mainland. Apple reported $14.76 billion in sales in the region, up 58% from the same quarter last year, although it was an easy comparison given that China was in stages of lockdown during the quarter.

Americas sales were up nearly 33% year-over-year to $39.57 billion.