Even Apple and Amazon have been hurt by supply-chain woes and labor shortages
Even the COVID-19 pandemic's biggest corporate winners can't escape some of the biggest problems now plaguing the economy. Apple and Amazon warned Thursday that global supply-chain snags and U.S. labor shortages will dent their earnings and worsen heading into the holidays.
The tech giants are grappling with a lack of semiconductors, higher shipping costs and steel costs, and an insufficient number of truck drivers, which has delayed deliveries. Those trends are likely to intensify over the next few months, Apple and Amazon noted in announcing their earnings on Thursday.
Shares of both companies fell on Friday.
Apple CEO Tim Cook estimated the company lost $6 billion in third-quarter sales because it couldn't keep up with customer demand. The company expects an even bigger hit in the last three months of 2021 due to supply constraints, Apple's chief financial officer warned investors on a conference call.
Though Apple's revenue climbed 29% to $83.4 billion in the three months ending in September, it fell short of analyst forecasts. Profits soared 62% to $20.6 billion.
"It's not a demand issue but a supply issue that continues to be the elephant in the room for Apple," Wedbush Securities analyst Dan Ives wrote in a research note.
At Amazon, products were redirected to fulfillment centers with sufficient staff to receive packages as a labor shortage intensified. That meant longer and more expensive routes in the third quarter, adding $1 billion in costs. The company also absorbed roughly $1 billion to pay for for wage increases and other labor costs.
Amazon now pays an average of more than $18 per hour, with some wages as high as $21, depending on shift and location. It's also paying signing bonuses of up to $3,000, the company said. That ate into profit.
Amazon reported $6.2 billion in third-quarter earnings, just shy of the $6.3 billion in the same three months last year. Revenue soared 15% to more than $110 billion.
Those higher labor and delivery costs may wipe out profit altogether in the last three months of this year, the company forecast. For the fourth quarter, Amazon said it expects to incur another $4 billion in costs.
—The Associated Press contributed to this report.
