Apple forecasts record Q2 2022 despite continued supply constraints and COVID-19 uncertainty

Apple just reported record earnings for Q1 2022, and it’s already looking ahead to another quarter of growth for Q2 2022. While the company is not providing specific guidance for the quarter due to uncertainties caused by the COVID-19 pandemic and supply constraints, CFO Luca Maestri says the company expects revenue growth to be “solid on a year-over-year basis.”

Speaking during Apple’s earnings call with investors and analysts today, Maestri said that Apple is forecasting a March quarter revenue record despite “significant” supply constraints continuing into the quarter.

Speaking to the Financial Times, Maestri said that supply constraints cost Apple more than $6 billion during the holiday quarter. The company expects this amount to be lower during Q2 2022 but nonetheless still a “significant” headwind for its revenue.

Maestri also elaborated that Apple does expect its revenue growth rate to decelerate in Q2 2022 compared to Q1 2022 due to a challenging year-over-year comparison. This is due to the later launch of the iPhone 12 lineup in 2020, which pushed some of that demand into the second quarter of 2021.

Meanwhile, speaking to the Wall Street Journal, Tim Cook also touched on supply constraints:

‘We saw supply constraints across most of our products,’ Mr. Cook said in an interview Thursday as the company released its results. ‘We’re forecasting that we will be less [constrained] in March than we were in the December quarter.’

Apple should see year-over-year revenue growth in the quarter that runs January through March, he said, while remaining circumspect about when the industry’s supply issues will clear up long-term. ‘We’re not projecting that,’ Mr. Cook said. ‘You need to know a lot of things to be able to make an accurate forecast there, like how are other people’s demands in addition to what kind of supply we can squeeze out.’

The iPad was particularly impacted by supply constraints during the holiday shopping quarter. This led to the revenue for category declining 14% year over year. The iPad was constrained due to “legacy nodes,” Cook explained to analysts.