Apple reported better-than-expected revenue but came up short of estimates on iPad sales for the fiscal fourth quarter and issued a disappointing margin forecast. The stock slid in extended trading.
Here’s how the company did compared to analysts’ estimates, according to LSEG.
- EPS: $2.10 vs. $1.99 expected
- Revenue: $114.48 billion vs. $113.39 billion expected
Here’s how Apple’s most important product lines did:
- iPhone revenue: $57.58 billion vs. $56.54 billion estimated
- Mac revenue: $10.79 billion vs. $9.61 billion estimated
- iPad revenue: $6.23 billion vs. $6.7 billion estimated
- Other Products revenue: $8.3 billion vs. $9.06 billion estimated
- Wearables, Home and Accessories revenue: $31.57 billion vs. $31.58 billion estimated
- Gross margin: 47.9% vs. 47.5%
It’s Apple’s first earnings report since CEO John Ternus took the helm on Sept. 1, succeeding Tim Cook.
On the earnings call, Apple said that it expects total revenue to grow between 7% and 10% on an annual basis in the December quarter, compared to the 6.1% average analyst estimate, according to LSEG. The company’s gross margin forecast for the current quarter is 45% to 46%, trailing the 46.3% average estimate.
Revenue increased 12% from $102.5 billion a year earlier, Apple said in a statement on Monday. Apple’s iPhone revenue in the quarter only included eight days of new Phone 18 Pro sales. And Apple’s new flagship device, the iPhone Duo, didn’t hit store shelves until the period was over.
Monday’s report includes a full quarter of higher-priced Apple products, as the company raised prices across the board in June after it signaled challenges with memory supply and other parts. Apple increased prices on iPhones by $100.
The iPhone maker is reckoning with a global memory crunch and a rush for computer components. Apple said on Monday that its memory costs were higher this quarter than in the June period.
Still, Ternus said in a statement that Apple had just capped off its “best fiscal year ever.” Ternus told CNBC’s MacKenzie Sigalos that Apple’s growth came in spite of supply constraints and foreign exchange headwinds.
“I think at this point, with everything we’ve achieved, it just feels like we’ve never been more confident that the best is yet to come,” Ternus said.
Ternus said that Apple “reluctantly” raised prices, which helped it offset component increases. Apple said tariff refunds added 5 cents to earnings per share.
Monday’s earnings call, set to start at 5 p.m. ET, will be the first with Ternus as CEO. Investors want to hear from him about the company’s plans in China after its AI software got approved, as well as the slew of recent product launches and how the company continues to grapple with global shortages of memory and flash storage.
Correction: A prior version of this story had an incorrect forecast for first-quarter guidance.
