How do you explain the crisis in the supply chain?
1:55
(CNN Business) -
Even Amazon and Apple are dealing with the global supply chain crisis.
Both companies reported revenue results Thursday that fell short of Wall Street analysts' expectations and warned that supply chain issues could affect business in the December quarter.
Amazon did not meet Wall Street projections for sales and earnings for the three months ended September 30, a rare mistake for the internet giant.
It posted net sales of $ 110.8 billion, up 15% from the same period last year, but below analysts' projections of $ 111.6 billion.
Net income for the quarter fell from a year earlier to $ 3.2 billion, well below the $ 4.6 billion analysts expected.
Biden's Vaccination Mandate Will Lead to More Supply Chain Disruptions, According to Raytheon CEO
Amazon CEO Andy Jassy warned in a statement that in the next fourth quarter, the company's consumer business expects to incur several billion dollars in additional costs.
Those costs, he said, come up "as we handle labor shortages, rising wage costs, global supply chain issues, and rising freight and shipping costs, all while doing whatever it takes. necessary to minimize the impact on customers and sales partners this holiday season. "
Apple posted quarterly sales of $ 83.4 billion, slightly lower than analysts had anticipated.
IPhone sales were also lower than analysts' forecasts, reaching $ 38.9 billion.
In a conference call with analysts after reporting the results, CEO Tim Cook focused on the fact that Apple managed to post a record quarterly sales despite supply constraints.
"Demand was very robust," he said, but also noted that "greater than expected supply constraints," including silicon shortages and a "related manufacturing disruption," had a negative impact of US $ 6 billion on the business. .
advertising
Shares of Amazon fell as much as 5% and shares of Apple fell more than 4% in after-hours trading on Thursday.
Joe Biden Says He's Considering Deploying the National Guard to Alleviate Supply Chain Crisis
Supply chain disruptions and personnel problems caused by the pandemic have intensified in recent months, affecting a wide range of industries. Several retailers, manufacturers and economists have warned that global supply chain constraints will lead not only to fewer discounts over the holidays this year, but will also result in a possible shortage of products on store shelves.
Apple has built a sophisticated supply chain over the years for its various hardware products, and Amazon has developed an advanced logistics operation for deliveries. Supply concerns are also creeping into important periods for both companies: for Amazon, the important holiday shopping season, and for Apple, the launch of several new products, including its iPhone 13 line.
Amazon previously warned that the second half of 2021 could bring slower growth compared to last year because more people were turning to face-to-face shopping compared to ordering online as vaccination was rolled out. And things don't seem to be looking up just yet. Amazon now projects much slower growth than usual for the last three months of the year.
Apple declined to provide revenue guidance for the December quarter, "given continued uncertainty around the world in the short term," CFO Luca Maestri said during the company's earnings call on Thursday.
"We estimate that the impact of supply restrictions will be greater during the December quarter. Despite this challenge, we are seeing high demand for our products," he said.
Amazon Apple supply chain
