Apple beats quarterly forecasts as memory chip costs weigh on margins

Apple beat Wall Street's quarterly expectations in the first earnings report under Chief Executive John Ternus, who took over from Tim Cook in September. The results showed strong demand for the iPhone, though the company continues to face pressure from a sharp rise in the cost of memory chips.

The iPhone maker reported fourth-quarter revenue of $114.5 billion, above what analysts had expected, and profit of $30.7 billion. iPhone revenue came in at $57.58 billion, also higher than projections. Services revenue, which includes iCloud, the App Store and other offerings, reached $31.57 billion. Shares were trading slightly lower in after-hours trading after the report.

Ternus said in a written statement that iPhone revenue reached a record for the September quarter and that Services posted an all-time high, calling it « capping off our best fiscal year ever ». « We're closing the year with our most ambitious lineup yet, » he said. « Together with the all-new Siri AI, it's an incredible lineup to carry us into the holiday season. »

Investors have been closely watching how rising memory chip prices affect Apple's profit margins. The company had signaled in July that the issue would weigh on its business. Even so, its fourth-quarter gross margin rose to 47.9 percent from 47.2 percent a year earlier, near the high end of its forecast range, though it declined from 50.1 percent in the previous quarter. Apple said tariff refunds added about one percentage point to the latest quarter's margin, compared with roughly two points in the June quarter.

Ternus has used his first months in the job to launch a series of products. These included the September debut of the foldable iPhone Duo, followed by new home products and last week's unveiling of Apple's first touchscreen MacBook Pro. One report noted that the iPhone revenue increase of 17 percent from a year earlier came even though Apple did not release a standard new iPhone model in its latest refresh, which included a pricier iPhone 18 Pro and Pro Max and higher prices on older models. Preorder sales for the foldable iPhone Duo were not included in the earnings figures.

Apple's results arrived after earnings reports from other large technology companies. Meta, Microsoft, Google and Amazon all released their latest figures in the previous two weeks. Those companies generally posted positive results, but shares in the Nasdaq Composite have fallen in recent days as investors weigh strong growth in cloud computing and demand for AI services against the hundreds of billions of dollars Microsoft, Amazon and others are spending on AI infrastructure.

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Caroline Mercer

World News Correspondent

Caroline Mercer covers public affairs, politics, business, culture and daily news for Core Memo. The role focuses on verification, context, and clear explanations for readers.

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