CUPERTINO: Apple Inc. has forecast slower-than-expected revenue growth for the current quarter, citing ongoing supply chain constraints that are limiting production of its popular devices. The cautious outlook sent the company’s shares down 5.5% in after-hours trading, despite reporting better-than-expected fiscal third-quarter earnings.

Chief Executive Tim Cook said the company’s biggest challenge remains securing enough advanced components, particularly memory chips and semiconductor technology needed to manufacture Apple’s custom silicon processors.

Apple Warns of Supply Chain Challenges

Speaking to analysts after the earnings release, Cook emphasized that demand for Apple’s products remains exceptionally strong, but supply shortages are preventing the company from fully meeting customer orders.

“We’re seeing some very significant supply constraints with limited flexibility in the supply chain,” Cook said.

He added that Apple is actively exploring alternative suppliers to improve the availability of memory chips and other critical components.

Revenue Outlook Falls Short of Expectations

Chief Financial Officer Kevan Parekh said Apple expects September-quarter revenue to grow between 9% and 11% compared with the same period last year.

The guidance fell short of Wall Street’s forecast of approximately 12% growth, according to market estimates.

Apple also projected mid-teen growth in iPhone revenue, slightly below analysts’ expectations, while forecasting gross profit margins of 47% to 48% for the quarter.

Strong Demand Drives Better-Than-Expected Results

Despite the cautious forecast, Apple delivered stronger-than-expected financial results for its fiscal third quarter, benefiting from robust demand for iPhones and Mac computers.

The company reported:

• Revenue: $109.42 billion, up 16.4% year-over-year.
• Earnings per share: $2.02, exceeding analyst expectations.
• iPhone sales: $54.25 billion, a 21.7% increase from a year earlier.
• Mac revenue: $10.35 billion, rising 28.7%.
• Gross margin: 50.1%, boosted partly by U.S. tariff refunds.

The quarter marked Apple’s strongest third-quarter iPhone sales on record, even as customers traditionally delay purchases ahead of new product launches expected later in the year.

Mac Sales Benefit From New Models

Cook said demand for the company’s Mac lineup remained particularly strong, driven by the entry-level MacBook Neo and the premium MacBook Pro.

Although Apple increased prices across several product categories due to higher component costs, consumer demand remained resilient.

However, Cook acknowledged that shortages of advanced chip manufacturing technology continue to restrict production capacity.

Services and China Revenue Raise Concerns

While hardware sales impressed investors, Apple’s Services business delivered softer-than-expected growth, raising questions about future revenue momentum.

Revenue from Greater China increased 22.4% to $18.82 billion, but still fell below analysts’ expectations.

Meanwhile, iPad sales declined 5.9%, with Cook attributing the slowdown to difficult comparisons with last year’s launch of the budget A16 iPad.

Investors Watching Future iPhone Demand

Analysts believe strong iPhone sales may have been supported by customers purchasing devices ahead of possible future price increases linked to ongoing supply shortages.

With Apple expected to unveil its next generation of iPhones in September, investors will closely watch whether demand remains strong if retail prices increase.

Despite the near-term supply challenges, Apple continues to benefit from a loyal customer base, growing hardware sales, and its position as one of the world’s most valuable technology companies.