Apple Beats Earnings in Ternus' First Quarter: Why Is the Stock Falling?
Apple exceeded Wall Street's profit and sales forecasts in CEO John Ternus' first quarter, yet its shares dropped 1% after-hours as Greater China sales missed expectations.
Apple earned $2.10 per share on revenue of $114.5 billion, up 12% from a year earlier, surpassing analyst expectations of $2.00 and $113.4 billion. The stock closed at $338.32 on Monday, down 1.83%, then dipped further to $335.00 after the earnings report.
Net income rose 12% to $30.71 billion, while gross margin reached 47.9%, near the top of Apple's 47% to 48% forecast range. One-off tariff refunds added $0.05 to earnings per share and one percentage point to the gross margin.
China Sales Disappoint
While iPhone revenue hit a September-quarter record of $57.58 billion, up 17%, and Mac sales jumped 24% to $10.79 billion, Greater China grew only 21% to $17.54 billion, falling short of analyst expectations of about $18.55 billion. iPad and wearables sales declined by 10% and 8% respectively.
Today, Apple is proud to report a September quarter revenue record of $114.5 billion, up 12 percent from a year ago, with iPhone reaching a September quarter record and Services reaching an all-time high, capping off our best fiscal year ever.
Security Concerns in Germany
Apple faces a security scare in Germany, where Digital Minister Karsten Wildberger confirmed that Apple warned some lawmakers and ministers of 'mercenary spyware,' hacking tools typically sold to governments. Germany's Federal Office for Information Security (BSI) instructed officials to assume their phones are compromised.
The security alert comes as Apple markets the iPhone on privacy. Memory chip costs remain a pressure point due to AI data centers buying up supply, with SK Hynix forecasting a memory shortage until 2030. Investors now focus on the December quarter, when analysts expect $2.88 per share.
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