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Amazon and Apple have both expressed concern about supply chain issues

Amazon and Apple have both expressed concern about supply chain issues



Even Amazon and Apple are experiencing difficulties as a result of the global supply chain shortage.


As a result of the disappointing revenue results, both companies warned that supply chain issues could have a negative impact on their businesses in the fourth quarter, December.


Despite exceeding Wall Street revenue and profit forecasts for the three months ended September 30, Amazon fell short of analysts' expectations, which is unusual for the internet behemoth. Analysts had predicted net sales of $111.6 billion, but the company reported net sales of $110.8 billion, a 15 percent increase year over year but still short of expectations. From $4.6 billion in the prior year's third quarter, net income dropped to $3.2 billion in the current quarter, falling far short of the $4.6 billion analysts had predicted.


Earlier this week in a statement, Amazon CEO Andy Jassy said the company's consumer business expects to incur additional costs of several billion dollars in the upcoming fourth quarter of fiscal year. They will occur "as we navigate labor shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs — all while doing everything we can to minimize the impact on customers and selling partners during this holiday season," he explained.


In its most recent quarter, Apple reported revenue of $83.4 billion, which was a slight decrease from analysts' expectations. iPhone sales fell short of analyst expectations as well, totaling $38.9 billion versus expectations of $41 billion.


Apple CEO Tim Cook highlighted the company's achievement of a quarterly sales record despite supply constraints during a conference call with analysts following the release of the results. Despite the fact that "greater-than-expected supply constraints," such as silicon shortages and "related manufacturing disruptions," had a $6 billion negative impact on the business, he stated that "demand was extremely robust."


In after-hours trading on Thursday, Amazon's (AMZN) stock fell as much as 5 percent, while Apple's (AAPL) stock fell more than 4 percent.


In recent months, the pandemic's disruptions to supply chains and staffing issues have become more severe, affecting a wide range of industries across the globe. There have been numerous warnings from retailers, manufacturers, and economists that global supply chain constraints will cause not only lower holiday discounts this year, but also a possible product shortage on store shelves.


Since its inception, Apple has built a sophisticated supply chain for its various hardware products, and Amazon has built a sophisticated logistics operation for its delivery services. Similarly, worries about supply are dragging both companies into critical periods: for Amazon, the crucial holiday shopping season, and for Apple, the launch of several new products, among them the iPhone 13 lineup, both of which are impacted by supply concerns.


With the introduction of vaccines, Amazon previously warned that the second half of 2021 would likely see slower growth than the previous year due to a shift in consumer behavior away from on-line ordering and toward in-person shopping. And it does not appear that things will be getting any better any time soon. Amazon is now forecasting significantly slower growth than usual for the final three months of the year, compared to the previous three months.


CFO Luca Maestri stated during the company's earnings call on Thursday that the company did not provide revenue guidance for the December quarter, citing "ongoing global uncertainty in the near term." "Supply constraints, we predict, will have a greater impact in the December quarter than in the previous quarter. Our products continue to be in high demand despite the fact that we face this obstacle "'He made a statement.



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