Key Takeaways:
Apple reported fiscal third-quarter earnings that topped Wall Street estimates, driven by stronger-than-expected iPhone sales, though misses in Services and Greater China weighed on the stock.
"Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment," Chief Executive Officer Tim Cook said in the earnings release. The call was Cook's last before incoming CEO John Ternus takes over Sept. 1.
The Cupertino, California-based company posted net income of $29.79 billion for the April-June period, up 27% from $23.43 billion a year earlier, helped by tariff refunds of 11 cents per share. Revenue rose 16% to $109.42 billion from $94 billion in the same quarter last year. iPhone revenue climbed to $54.25 billion from $44.5 billion a year ago, topping the $53.6 billion analysts had projected. Services, Apple's second-largest segment, brought in $30.74 billion, below the $31.36 billion consensus, while Greater China revenue of $18.82 billion missed estimates of $19.58 billion.
The results come as Apple navigates rising memory and storage costs driven by the global artificial intelligence build-out, which has already prompted price increases on Macs and iPads. Analysts expect the company to raise iPhone prices at its annual September launch. Jefferies analyst Edison Lee estimated that higher memory costs could reduce iPhone gross margins to 34.5% from 38%. KeyBank Capital Markets' Brandon Nispel warned that price increases could slow unit and user growth, ultimately pressuring Services revenue. Apple's new device leasing program, announced Tuesday, may help offset some of those concerns. Shares fell 2.3% to $325.91 in after-hours trading, paring a year-to-date gain of about 20%.
The earnings beat signals resilient demand for Apple's core product despite cost headwinds from the AI build-out. Investors will watch the September iPhone launch for pricing details and the next earnings call for margin updates under incoming CEO Ternus.
This article is for informational purposes only and does not constitute investment advice.
