Apple shares slid 8% in extended trading after the tech giant issued weak guidance for the current period, citing ongoing supply constraints, even as fiscal third-quarter earnings and revenue topped Wall Street expectations according to company financial disclosures. Net income climbed to $29.79 billion, or $2.02 per share, up from $23.43 billion, or $1.57 per share, a year ago, with earnings bolstered by 11 cents per share from tariff rebates.
Apple Fiscal Third-Quarter Earnings and Revenue Breakdown
Total revenue reached $109.42 billion, edging past LSEG consensus estimates of $108.65 billion. iPhone sales served as the primary growth engine, surging 22% to hit $54.25 billion and besting the $53.86 billion expected by analysts. Revenue growth topped 15% for a third straight quarter, according to the company’s financial report.
Other hardware and service segments delivered mixed results compared to analyst estimates tracked by LSEG:
- Mac: $10.35 billion vs. $8.74 billion estimated
- iPad: $6.19 billion vs. $6.92 billion estimated
- Wearables: $7.88 billion vs. $7.82 billion estimated
- Services: $30.74 billion vs. $31.22 billion estimated
Gross margin landed at 50.1%, though that figure is not directly comparable to the analyst consensus of 47.9% due to tariff rebates. Apple held $146.52 billion in cash at the close of the quarter.
Did you know? Apple’s net income grew compared to the same period last year, driven heavily by a 22% increase in iPhone revenue.
Supply Constraints and Global Memory Crunch Pressures
Despite the earnings beat, executives pointed to severe headwinds ahead. Apple is currently reckoning with a global memory crunch, described by CEO Tim Cook as a “hundred-year flood,” alongside a fierce rush for chip manufacturing capacity. These pressures have already forced the company to lift prices on Macs and iPads.
While Apple has not officially announced price hikes for iPhones, many industry analysts expect increases as soon as this year. These rising hardware costs coincide with executive changes. This financial report marks CEO Tim Cook’s final earnings call before he hands leadership over to John Ternus, a 25-year Apple veteran and the current head of hardware, who spoke very little on the recent conference call.
Artificial Intelligence Strategy and Upcoming September Launches
Investor scrutiny remains fixed on Apple’s artificial intelligence timeline as markets worry the company has fallen behind competitors. To address this, Apple is gearing up to launch a redesigned Siri powered by Google technology alongside new iPhone hardware in September.
This upcoming product cycle represents a critical test for the company. CNBC reporters covered the earnings announcements from bureaus in San Francisco and Englewood Cliffs, New Jersey, noting that the broader market reaction was dominated by the cautious forward guidance rather than the revenue beat.
Frequently Asked Questions
What was Apple’s revenue for the fiscal third quarter?
Apple reported revenue of $109.42 billion, beating LSEG consensus estimates of $108.65 billion.
Why did Apple stock slide in extended trading?
The stock dropped 8% in extended trading because the company issued weak guidance for the current period, pointing to supply constraints and a global memory crunch.
Who is taking over as Apple CEO?
John Ternus, a 25-year Apple veteran and current head of hardware, is taking over leadership from Tim Cook.
When is Apple launching its AI-powered Siri?
Apple is preparing to launch a redesigned Siri using Google technology alongside new iPhone hardware in September.
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