Apple Beats Quarterly Revenue Estimates but Warns of Rising Chip Costs

OPA WIRE, Nov 3 (OPA) — Apple posted revenue of $114.5 billion (€102.1bn) for the July-September period, marking a 12% increase from $102.5 billion a year earlier. The Cupertino, California-based technology giant earned $30.71 billion, or $2.10 per share, topping FactSet analyst consensus expectations of $1.99 per share on revenue of $113.4 billion. Tariff refunds contributed $0.05 per share to the bottom line, lifting the company's gross margin to 47.9%.

iPhone revenue rose 17.5% to $57.6 billion, while Mac sales increased nearly 24%. Conversely, iPad revenue dropped 10.4% and wearables, home and accessories fell 7.9%. The quarter marked the first financial report under CEO John Ternus, who assumed the role on September 1, succeeding Tim Cook. Ternus highlighted a 21% revenue recovery in Greater China during the quarter.

Profit improvement was aided by tariff refunds that added roughly one percentage point to gross margins. The period captured only initial sales of the premium iPhone 18 Pro models, while the new foldable iPhone Duo launched in the current quarter. Research and development spending rose 32% to $45.8 billion over the full fiscal year, while overall capital spending declined 29% to $9 billion.

Looking ahead, Apple projected December-quarter revenue growth between 7% and 10%, outpacing the 6.1% analyst consensus. Yet, rising memory chip expenses and outlays for the rollout of Siri AI are expected to compress gross margins to between 45% and 46%. Apple is utilizing inventory bought at lower prices to offset cost pressures while maintaining a cautious capital expenditure approach compared to industry peers.