Apple beat Wall Street’s profit and sales forecasts in John Ternus’ first quarter as CEO. Its shares still slipped about 1% in after-hours trading, while sales in Greater China fell short.
Apple earned $2.10 per share on revenue of $114.5 billion, up 12% from a year earlier. Analysts had expected about $2.00 and $113.4 billion.
The stock closed at $338.32 on Monday, down 1.83%, then dipped to $335.00 after the report. Options traders had priced a swing of about 3.5%, per Pepperstone.
Where Did Apple Beat and Where Did It Miss?
Apple’s results kicked off a busy Wall Street week. However, of the two things investors were watching to move price:
- Net income rose 12% to $30.71 billion.
One-off tariff refunds added $0.05 to earnings per share, Apple said.
- Gross margin, the share of sales kept after production costs, came in at 47.9%.
That sits near the top of Apple’s 47% to 48% forecast. Tariff refunds added one percentage point.
Memory chip costs remain the pressure point. AI data centers are buying up supply, and SK Hynix has forecast a memory shortage until 2030.
iPhone revenue hit a September-quarter record of $57.58 billion, up 17%. Mac sales jumped 24% to $10.79 billion.
Greater China grew 21% to $17.54 billion, but analysts had expected about $18.55 billion. iPad and wearables sales fell 10% and 8%. Services matched forecasts at $31.57 billion.
“Today, Apple is proud to report a September quarter revenue record of $114.5 billion, up 12 percent from a year ago, with iPhone reaching a September quarter record and Services reaching an all-time high, capping off our best fiscal year ever.”
Why Is Apple Stock Falling Despite the Beat?
Most of the drop came before the numbers. Apple shares fell 1.83% during Monday’s regular session, hours ahead of the report.
The results then gave sellers a reason to stay. InvestingLive called Greater China the quarter’s clear weak spot, and said the shortfall could temper any rally.
Part of the beat also came from one-off help. Without the $0.05 tariff refund boost, earnings would have been $2.05 per share, a narrower beat.
The bigger test is still ahead. Apple gives its December-quarter outlook on the earnings call. It is the first quarter to include a full holiday season of iPhone 18 Pro sales, InvestingLive noted.
Why Are German Officials’ iPhones on Alert?
Apple also faces a security scare in Germany. Digital Minister Karsten Wildberger confirmed Apple warned some lawmakers and ministers of “mercenary spyware,” hacking tools usually sold to governments.
Germany’s Federal Office for Information Security (BSI) told them to assume their phones are compromised. Nobody has named the attacker, and Apple has not commented, Euronews reported.
Apple sells the iPhone on privacy. Investors now turn to the December quarter, when analysts expect $2.88 per share, Nasdaq data shows.
