Apple CEO Tim Cook came out of the gate strong: Revenue firmly beat expectations pretty much across the board compared to Wall Street estimates, and there was only one segment – the iPad – that was down compared to the year-ago quarter.  Cook: Let’s break this down.

Revenue: $97.28 billion, up 8.59% compared to the year-ago quarter iPhone revenue: $50.57 billion, up 5.5% compared to the year-ago quarter Services revenue: $19.82 billion, up 17.28% compared to the year-ago quarter Other Products revenue: $8.81 billion, up 12.37% compared to the year-ago quarter Mac revenue: $10.44 billion, up 14.73% compared to the year-ago quarter iPad revenue: $7.65 billion, down 1.92% compared to the year-ago quarter 

Lots of double-digit growth, but with two glaring weaknesses: the iPhone and the iPad. So, what does Cook have to say about this? Reassuring investors that it’s not customer demand that’s the issue. Makes sense. Overall, it was a very strong quarter, especially given the pressures. So why did Apple shares dip 4% during extended trading? Apple CFO Luca Maestri broke the bad news: Cook went on to add some more color (and perhaps make it less scary) in an answer to an analyst’s question: How much of a hit is $4 to $8 billion? If we look back to Q3 2021, Apple pulled in $81.4 billion in revenue. “But looking ahead, we see two causes of supply constraints. One is the COVID-related disruptions; and there’s the industry-wide silicon shortages that will continue. We’ve estimated the constraints to be in the range of $4 billion to $8 billion. And if you – these constraints are primarily centered around the Shanghai corridor. And the – on a positive front, almost all of the affected final assembly factories have now restarted. And so, the range, the $4 billion to $8 billion range reflects various ramps of getting back up and running. We’re also encouraged that the COVID case count that’s been reported in Shanghai has decreased over the last few days. And so, there’s, there’s some reason for optimism there.” This means Apple has prepared the way for a 5% to 10% hit. Quite a hit. But it might also be a case that Apple has paved the way for a worst-case scenario here, and the final result won’t be so dire. We’ll have to wait and see.