TLDR
- Apple stock fell 3% in extended trading after John Ternus’ first report as CEO.
- EPS was $2.10 versus $1.99 expected, and revenue hit $114.48 billion.
- iPad and Wearables, Home and Accessories revenue missed estimates.
- December quarter gross margin is guided to 45% to 46%, below the 46.3% estimate.
- December quarter revenue growth is guided to 7% to 10%, above the 6.1% estimate.
Apple (AAPL) stock slid 3% in extended trading Monday after its fiscal fourth-quarter report. Earnings and revenue beat, but a soft margin forecast took the shine off.
It was the first report since John Ternus took over as CEO on Sept. 1, succeeding Tim Cook. Ternus called the past year Apple’s “best fiscal year ever.”
Earnings per share came in at $2.10, above the $1.99 analysts expected, according to LSEG. Tariff refunds added 5 cents to that number.
Revenue reached $114.48 billion, compared with $113.39 billion expected. That is up 12% from $102.5 billion a year earlier.
Gross margin was 47.9%, ahead of the 47.5% estimate. So far, so good.
How the Product Lines Did
iPhone revenue was $57.58 billion, topping the $56.54 billion estimate. The quarter held only eight days of iPhone 18 Pro sales.
The new iPhone Duo did not reach store shelves until the period ended. It added nothing to these results.
Mac was the star at $10.79 billion, well above the $9.61 billion estimate. iPad was the weak spot at $6.23 billion versus $6.7 billion expected.
Wearables, Home and Accessories brought in $8.3 billion, short of the $9.06 billion estimate. Other Products came in at $31.57 billion, a penny-level miss against $31.58 billion.
Apple raised prices across the board in June after flagging memory supply problems. iPhone prices went up by $100.
Ternus said Apple “reluctantly” raised prices, and that it helped offset component costs. Memory costs were still higher this quarter than in the June period.
The Guidance Problem
CFO Kevan Parekh guided December quarter gross margin to between 45% and 46%. That trails the 46.3% average estimate and is lower than the fourth quarter.
Apple expects revenue to grow 7% to 10% in the December quarter. Analysts had looked for 6.1%.
Services sales are expected to rise 8% to 9%, which points to slower growth. Ternus told CNBC’s MacKenzie Sigalos that Apple has “never been more confident that the best is yet to come.”
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