Apple will be replaced as the world’s largest company by market capitalisation after missing quarterly revenue expectations as the microchips shortage continues to bite. The iPhone maker has held the title since early 2020 but a rare revenue miss - its first since the December quarter of 2018 - will see software giant Microsoft replace it in the top slot.
Apple reported revenue of $83.4 billion for the three months to 30 September 2021 (the company’s fourth fiscal quarter), roughly $1.7 billion below analysts’ estimates of $85.1 billion.
Apple’s chief financial officer Luca Maestri told analysts that the ongoing supply constraints hurt revenue by around $6 billion, and that the impact will be even bigger in the crucial run-in to Christmas. Multiple product lines were affected but the bulk of the revenue shortfall came from iPhone sales, which were $2.6 billion below analyst estimates.
ICONIC PHONE SHIPMENTS CUT
Earlier this month, reports suggested that Apple planned to cut shipments of its latest iPhone 13 by 10 million units by the end of 2021 due to shortages in communications chips from some of its suppliers.
While quarterly earnings of $1.24 were marginally ahead of market predictions of $1.23, investors were left shocked and sold the stock down by more than 3% in after-hours trading, implying a $147.60 share price. That would value Apple at approximately $2,425 billion.
By contrast, Microsoft enjoyed a forecast-thumping September quarter, beating analyst estimates on both revenue ($45.3 billion versus $43.9 billion) and earnings ($2.27/$2.07). That saw the software giant’s stock nudge modestly higher in after-hours trade to an all-time high $324.35, putting its market cap at $2,430 billion to take the number one spot.
Amazon, which has also suffered supply chain disruption, remains third with a $1,665 billion market value.
