Apple, Amazon Results Spark Fears of Unhappy Holiday Season

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(Bloomberg) — Apple Inc. and Amazon.com Inc. reported disappointing quarterly results in a sign that the global supply-chain crisis is hobbling even the mightiest companies, erasing hundreds of billions of dollars from their combined market valuations. 



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Amazon, the world’s largest e-commerce company, said its entire fourth quarter profit could be wiped out because of a surge in the cost of labor and fulfillment. Apple, meanwhile, said it lost $6 billion in sales because it can’t meet demand for its products, and could lose more next quarter. 

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But added together, the tech giants delivered a clear message to investors: This holiday season is going to be difficult. As the economy emerges from the worst pandemic in a century, getting enough products to consumers is a daunting challenge for nearly everyone. 

“It’s going to be a rough holiday season for sure,” said Tuna Amobi, an analyst at CFRA Research. “Expectations are going to come down, across the board.”

In its latest quarter, Apple reported lower revenue than projected, sending its shares down as much 3.8% in U.S. premarket trading Friday. Amazon dropped nearly 5%.

Read more: Apple, Amazon are poised for $180 billion loss of value 

Apple Chief Executive Officer Tim Cook told investors that sales would have been $6 billion higher without supply constraints — most notably, a lack of semiconductors.

The shortage is affecting “most of our products,” he said on a conference call. “Demand is very robust.”

The company has a slew of new devices that it needs to get into consumers’ hands before the holidays, a period that’s expected to set sales records. In addition to the iPhone upgrade, Apple has rolled out new watches, iPads, Mac computers and other items.

Supply-chain constraints will make many of those items harder to get. Cook expects the problem to eclipse the $6 billion toll it took last quarter. 

Read more: How shortages are threatening Apple’s holidays

The Cupertino, California-based company didn’t provide formal guidance for the current quarter, but analysts have…

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