Key Highlights

  • AAPL shares were trading down 2.18% at $330.95 from a prior close of $338.32.
  • Fiscal fourth-quarter Revenue was $114.5 billion, with EPS of $2.10.
  • December-quarter gross Margin is guided to 45% to 46%.

Apple (NASDAQ:AAPL) was trading down 2.18% at $330.95 in today's regular session, a decline of $7.37 from the prior close of $338.32, and below its 50-day average. The company reported its first Earnings under new CEO John Ternus, with fiscal fourth-quarter revenue of $114.5 billion against an estimate of $113.4 billion and EPS of $2.10 against $1.98. The decline weighs on the Dow even as the Nasdaq rebounds on a chip-stock bounce.

Record September Quarter by Product and Service

September-quarter revenue rose 12% and was a September-quarter record. Fiscal-year revenue was $478.8 billion, up 15%, with EPS of $8.98, up 20%. Quarterly Operating Cash Flow was $28.1 billion.

iPhone revenue was $57.6 billion, up 17%, and Mac was $10.8 billion, up 24%. iPad was $6.2 billion, down 10%, and Wearables, Home and Accessories was $8.3 billion, down 8%. Services reached an all-time high of $31.6 billion, up 10%, and Greater China revenue rose 21%. China and iPad sales were below estimates.

Memory Pricing and the December-Quarter Guide

Company gross margin was 47.9% and products gross margin was 37.2%, including about a one-point benefit from Tariff refunds. Excluding the refunds, both fell about one point sequentially on higher memory costs. Services gross margin was 76%, and operating expenses were $19.2 billion, up 21%.

December-quarter guidance calls for revenue growth of 7% to 10%, which would be the best quarter in company history, with Services growth of 8% to 9% and gross margin of 45% to 46%, against roughly 46% to 47% expected. Operating expenses are guided to $20.4 billion to $20.8 billion and the tax rate to around 17%. Management described memory pricing as unprecedented and expects it to keep rising. Apple raised prices on Mac, iPad and iPhone, Manufacturing purchase obligations rose $33 billion, and Siri AI cloud costs will pressure Services cost of sales.

Apple returned $28 billion to shareholders in the quarter and ended with $137 billion of cash and securities and $80 billion of debt. It no longer targets net cash neutral.

Analyst Moves, Regulation and Share Data

Goldman Sachs, Morgan Stanley and JPMorgan trimmed their targets, while UBS and Baird raised theirs. Spain's competition regulator also opened sanction proceedings against Apple, which Apple disputes. The stock has trailing earnings of $8.73 per share, a trailing price-to-earnings ratio of 36.98, a Dividend Yield of 0.32% and a 52-week range of $243.42 to $351.73.

Memory Cost Trends and December-Quarter Delivery Are the Next Markers

Apple is trading lower on a margin outlook shaped by memory costs, despite record September-quarter revenue and a December-quarter revenue guide of 7% to 10% growth. The next items to follow are memory pricing into 2027, the December-quarter results, and the regulatory proceedings in Spain.