Apple’s Earnings Beat Is Shadowed by a Supply Crunch
Apple’s Earnings Beat Is Shadowed by a Supply Crunch
John Ternus began his tenure as Apple’s chief executive in September and delivered a stronger-than-expected fiscal fourth-quarter report on Monday, breaking from a weaker run of results among several major technology companies.
Apple reported $114.5 billion in revenue for the quarter, above Wall Street’s $113.46 billion estimate, while earnings per share reached $2.10 against expectations of $2. iPhone revenue came in at $57.58 billion, and Mac sales of $10.79 billion beat forecasts by more than $1 billion. “This is an amazing time at Apple,” Ternus told analysts, pointing to what he called one of the company’s most prolific product-launch periods.
The celebratory case has clear caveats. Greater China revenue was $17.54 billion, below the $18.75 billion expected, while iPad sales also missed forecasts. Investing.com analyst Jesse Cohen called the China shortfall “a worrying pattern,” arguing that weakness in wearables, home products and accessories meant the issue extended beyond a single market.
Apple is also confronting the cost of its own demand. Ternus said memory pricing was “unprecedented,” and CFO Kevan Parekh said that without tariff refunds, company and product gross margins would each have fallen about one percentage point sequentially, largely because of higher memory costs.
The squeeze is most visible in the new $1,999 iPhone Duo. Released on October 23 after preorders began October 16, Apple’s first foldable handset quickly developed delivery waits stretching into late January 2027. Chief operating officer Sabih Khan said Apple was “thrilled” by the initial response, but conceded the device remained constrained and that it was “really hard to predict when supply and demand will be in balance.”
Khan said constraints had also affected iPhones, Macs and iPads, with advanced chipmaking capacity the largest bottleneck and memory expected to constrain Mac and iPad supply in the December quarter. Apple’s beat has given Ternus a buoyant debut; the supply chain will determine how long it lasts.
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