Shares rise after Tim Cook says supply chain improving
Supply chain experts have spoken.
AppleOn Thursday, CEO Tim Cook allayed investors’ fears that the supply chain issues plaguing industries around the world are beginning to resolve for Apple.
Cook told CNBCAccording to him, supply constraint will be less than in the December quarter. Apple shareholders loved that. Apple shares rose by as much as 5 percent in post-hours trading on Thursday. Friday’s shares were higher than 4%.
Cook’s optimism about the positive picture was contagious, but his remarks on supply chain improvement were not much different than those of others in the industry. From IntelTo TeslaExecutives have made similar forecasts about improving the supply chain in 2022. This is the difference: These companies own shares fell after earningsApple received a nice boost in investors’ confidence.
Cook’s reputation as a supply chain expert is what has made him famous. This is a major reason Cook was appointed CEO after Steve Jobs’ departure a decade earlier. Cook is reportedly famousFor example, negotiating fractions of cents on parts.
Cook was actually asked by an analyst on Thursday whether he is satisfied with Apple’s supply chains. Spoiler alert! Cook stated that Apple has its supply chain exactly the way he likes it. He also expressed optimism about the company’s ability to handle Covid disruptions, and ensure the future of the supply chain.
Cook did not say anything that we didn’t know yet.
Elon Musk, Tesla CEO and CEO stated that the company was doing well during Wednesday’s earnings conference. faces tough supply constraintsThis is especially true for the computer chips that vehicles require. Musk projected strong growth for Tesla in the coming year, even though Tesla won’t have new products to offer.
The supply chain has been a topic of positive conversation for Pat Gelsinger, Intel’s CEO. Cook’s Thursday comments were very much in line with his statement last week that he anticipates “incremental changes” in the supply chains through 2022.
However, it may prove more difficult for smaller tech companies who make hardware. SonosSmart speaker maker XL raised its prices due to increased costs in the supply chain last year. RokuLast year, streaming device maker Streaming TVs told investors its supply chain costs were affecting its margins. These companies include XeroxAnd Western DigitalAlso, this month was a time of dire warnings regarding their supply chains.
These signals indicate that smaller businesses may find it more difficult to manage supply chain problems than Apple giants. Apple still delivers incredible margins, despite all the extra expenses.
Even though it is still early in earnings season, there are clear messages from tech companies: Titans such as Apple have the ability to protect themselves against the worst supply chain issues. Comments from Cook and other industry leaders bode well for all of us going into the next year.
At the moment, however, Cook’s supply-chain predictions are more trusted than any other.
Robert Hum from CNBC contributed to this article.