Apple's Strong Earnings Report Weighed Down by Supply Constraints

Apple released its fiscal third-quarter earnings report on July 30, showing strong results. Total revenue rose 16% year-over-year to $109.4 billion, with a 22% year-over-year increase in iPhone revenue.

The company's recent pricing increases are expected to help mitigate the impact of supply constraints and memory inflation, which will weigh on results through 2027. Morningstar projects a growth headwind of about 3% in the September quarter and fiscal 2027 due to these factors.

Despite this, Apple is still expected to grow nicely, with double-digit growth projected for 2027 led by pricing increases. The company's fair value estimate has been trimmed to $285 from $290 to reflect short-term supply constraints and memory cost pressures.