Apple beats revenue estimates but stock falls on weak guidance
Apple reported quarterly revenue of $114.5 billion, up 12% year-over-year, driven by iPhone sales, though the stock declined after hours due to disappointing outlooks for the holiday quarter. The results mark the first earnings report under new CEO John Ternus, with iPad and China sales missing analyst expectations.
Apple announced its first earnings report since John Ternus assumed the role of CEO from Tim Cook. Revenue rose 12% from a year earlier to $114.5 billion, slightly exceeding market expectations. iPhone revenue increased 17.6% to $57.6 billion, a figure that included only eight days of sales for the new iPhone 18 Pro lineup. The company raised iPhone prices by $100 in September in response to memory chip shortages, which contributed to a global smartphone shipment decline of 20% in the third quarter. Despite the revenue beat, the stock fell in after-hours trading as the company missed analyst expectations for the holiday quarter, which Wall Street had estimated at over $150 billion. Guidance for gross margins in the holiday quarter was set at 45% to 46%, down from the current 47.9%, due to rising memory chip costs. Service revenue grew 10% to $31.6 billion, while iPad revenue of $6.23 billion missed the $6.7 billion estimate. China revenue came in at $17.5 billion, below the $18.9 billion forecast. The new foldable iPhone Duo was not on sale during the quarter. Apple’s market capitalization stands at approximately $4.9 trillion, competing with NVIDIA for the top spot in the market. Investors continue to debate valuations, with some noting that Apple has outperformed other Magnificent Seven companies this year by avoiding the AI arms race, while others point to circular financing risks in the broader tech sector.