Apple Reports Fourth-Quarter Earnings as iPhone 18 Sales Face Margin Pressure
Apple reported its fourth-quarter earnings after the market closed on Monday, delivering investors their first look at early sales figures for the iPhone 18 Pro alongside results that outpaced the same period last year. CNBC reported that Bloomberg analyst consensus estimates projected earnings per share of $2 on revenue of $113.46 billion. Yahoo Finance noted that Apple posted earnings per share of $1.85 and revenue of $102.46 billion in the same period last year.
The company enters the report following a fiscal quarter where revenues reached $109.4 billion, representing a 16.4% year-over-year increase, according to data cited by The Globe and Mail. Analysts surveyed by Investing.com estimated revenue growth near the top of management’s 9% to 11% guidance range, driven largely by hardware and services performance.
Component Cost Inflation and Memory Shortages Test Gross Margins
Surging prices for computer parts, including flash storage and memory used across mobile devices and laptops, have created a difficult environment for consumer electronics. IDC’s Ryan Reith told CNBC that the smartphone and PC market has “never been worse.” IDC shipments data indicates the smartphone market is set to drop nearly 17% this year, while personal computer shipments could fall 11%.
Bank of America analyst Wamsi Mohan stated in a note to clients that his team maintained a conservative outlook on earnings due to gross margin concerns and price increases. Mohan pointed out that Apple’s gross margins in the September quarter would receive a positive boost from tariff refunds, but warned that margins could decline in subsequent quarters. Apple reported a gross margin of 49.3% in the June quarter, though executives cautioned that the September period would fall between 47.5% and 48%.
Barclays analysts maintained an underweight rating on Apple shares over the weekend, citing iPhone uncertainties during this product cycle, limited artificial intelligence monetization, and renewed App Store concerns. The firm noted that the pricing benefits Apple previously enjoyed from the memory backdrop due to its scale and preferential purchasing terms are beginning to fade.
Chief Executive Officer John Ternus Faces First Earnings Test
Monday’s earnings call marks the first financial review led by Chief Executive Officer John Ternus, who formally succeeded Tim Cook on September 1. Ternus has maintained a visible public schedule since taking the role, appearing at headquarters to unveil the iPhone Duo on September 9, walking the red carpet at the Emmys, and opening an Apple store in New York for the iPhone Pro launch.
Yahoo! Ternus’s remarks will also address how the company approaches AI development following a restrained capital expenditure strategy that stands apart from the heavier infrastructure spending of rival megacap technology firms.
iPhone Duo Launch and Holiday Quarter Guidance Remain in Focus
The $1,999 iPhone Duo foldable phone went on pre-order on October 16 and officially launched on October 23, falling outside the fiscal fourth quarter that ended in September. Yahoo!
Investing.com reported that delivery waits estimated by Bank of America span approximately 79 days for certain configurations. Strong initial demand balanced against tight manufacturing supply could provide support for the critical holiday quarter, though some early buyers reported display creasing along the inner fold that prompted Apple to offer replacements.
Apple Shares Outperform Wall Street Peers Ahead of Earnings
Apple shares are up 27% for the year as of Friday’s close, outperforming leading peers on Wall Street as the preferred megacap technology stock heading into earnings season.
Frequently Asked Questions About Apple’s Earnings
What revenue and earnings per share did analysts expect for the fourth quarter?
Bloomberg analyst consensus estimates projected earnings per share of $2 on revenue of $113.46 billion, compared to earnings per share of $1.85 and revenue of $102.46 billion in the same period last year.
How much did iPhone revenue contribute to the quarter?
LSEG data cited by Investing.com and Yahoo Finance showed that iPhone sales were projected to reach approximately $56.54 billion, representing a 15% increase compared to the previous year.
When did the iPhone Duo go on sale?
The iPhone Duo went up for pre-order on October 16 and officially went on sale on October 23, meaning its sales figures will contribute directly to the current holiday quarter rather than the fourth quarter that ended in September.
What was Apple’s gross margin guidance for the September quarter?
Apple warned that its gross margin for the September period would fall between 47.5% and 48%, down from the 49.3% reported in the June quarter which included benefits from tariff refunds.