SAN RAMON, Calif. (AP) — Apple on Thursday reported strong quarterly results despite supply shortages, but warned that its growth slowdown is likely to deepen. The company said it’s still struggling to get enough chips to meet demand and contending with COVID-related shutdowns at factories in China that make iPhones and other products.

Although initial results for the January-March period topped analysts’ projections, the good news was quickly eclipsed when management warned of trouble ahead during a conference call.

The main takeaway: Apple’s sales will be squeezed by the supply problems much harder in the current April-June quarter than in its previous one. The company estimated it would take a hit to revenue of $4 billion to $8 billion as a result.

“It will affect most of the product categories,” Apple CEO Tim Cook told analysts.

Apple’s stock price fell 4% in extended trading, reversing a positive response after the Apple report initially came out. Before the sobering forecast lowered the shares even further, Apple’s stock had fallen 10% from its peak in early January.

“It was a solid quarter, but it looks like COVID has reared its ugly head,” said Edward Jones analyst Logan Purk. “It looks like it’s two steps forward, one step back.”

Like a wide gamut of companies ranging from automakers to health care providers, Apple has been grappling with shortages of computer chips and other key technology components required in modern products.

Apple had expected the crunch to ease as this year progressed, but recent COVIDs outbreaks are starting to curtail production in Chinese factories that the company relies on.

Despite those headwinds, the results for the January-March period drew a picture of a still-expanding empire generating massive profits that have yielded the firm a $2.7 trillion market value — the largest among U.S. companies.

Apple announced a 5% increase in its quarterly dividend, which has been steadily rising since the company revived the payment a decade ago. Effective May 12, Apple’s new quarterly dividend will stand at 23 cents per share — more than doubling from 10 years ago.

Even without that supply issues, Apple would still be facing some of the same challenges confronting many other major technology companies. After enjoying a pandemic-driven boom, it’s becoming tougher to deliver the same levels of spectacular growth that drove tech-company stock prices to record highs. The crisis continues to fade away and growth on a year-to-year basis has become harder to maintain.

Apple’s most recent quarter illustrated the high hurdles the Cupertino, California, company is now trying to clear. Revenue for the period totaled $97.3 billion, yet it was only 9% higher than the same time last year. It marked the first time in the past six quarters that Apple hasn’t produced double-digit gains in year-over-year revenue. That number, however, exceeded the average revenue estimate of $94 billion among analysts surveyed by FactSet Research, indicating that Apple’s growth slowdown hasn’t been quite as severe as investors were anticipating.

Quarterly profit came in at $25 billion, or $1.52 per share, a 6% increase from the same time last year. Analysts had predicted earnings per share of $1.42.

As usual, the iPhone remains Apple’s marquee product with sales of $50.6 billion in the past quarter — a 5% uptick from the same time last year. Apple has been trying to keep its iPhones sales growing while chips remain in short supply by siphoning some components from the iPad, which saw its sales fall 2% from last year to $7.6 billion.

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