Amazon, Apple weighed down by supply and chip troubles

Lack of computer chips, spiking labour costs casting a shadow for both tech giants.

Amazon and Apple announced billions of dollars in quarterly profits on Thursday, but supply chain bottlenecks and the global chip shortage dented the tech giants, which have been riding a pandemic-stoked boom.

Apple said sales of its signature iPhone and iPad were held back due to supply constraints, while Amazon struggled to get products and enough workers to meet demand.

Both firms soared in the pandemic era as people relied on their products and services, but now ripple effects that have emerged, such as lack of computer chips and spiking labour costs, are casting a shadow.

Amazon on Thursday reported its profit in the recently ended quarter slipped to $3.2 billion, as the pandemic, hiring and product shortages drove up costs.

The e-commerce colossus said its sales climbed to $110.8 billion, but its profit was about half of its net income from the same quarter last year.

"We've always said that when confronted with the choice between optimizing for short-term profits versus what's best for customers over the long term, we will choose the latter," said Amazon chief executive Andy Jassy, in a message explaining the company has had to spend more to do its work.

Apple on Thursday reported its profit in the recently ended quarter leapt on massive revenue that still fell short of analysts' expectations.

The iPhone maker said its net income of $20.5 billion came on revenue of $83.4 billion, a record high for its quarter ending in September.

The semiconductor drought -- caused by a mix of factors, including a surge in demand due to the Covid-19 pandemic and US-China trade tensions -- has affected industries across the globe, from tech giants to car makers.

Calling the issues facing companies a "supply chain black cloud," Wedbush analyst Dan Ives said it was effecting "every tech, auto and consumer stalwart," including Amazon.

"It's not a demand issue but a supply issue that continues to be the elephant in the room for Apple and every other tech/consumer player heading into holiday season," Ives wrote in a note to investors.

Apple CEO Tim Cook told an earnings call that one part of the supply problem was the chip shortage, while there were also Covid-related manufacturing disruptions in Southeast Asia.

"It is effecting pretty much all of our products," he said.

- Whopping profits elsewhere -

Twitter, however, on Tuesday posted a loss in the quarter, fueled by the more than $800 million settlement in a lawsuit alleging investors were misled about slowing user growth on the platform.