Apple posted its best June quarter ever as Tim Cook prepared to hand the CEO role to John Ternus, with revenue up 16% year over year to $109.4 billion. The stock still fell as much as 8% in after-hours trading, as investors focused on looming supply constraints and a valuation near 40 times earnings.
Apple's stock dropped as much as 8% in after-hours trading even after the company reported its strongest June quarter on record. Revenue rose 16% year over year to $109.4 billion, but the market's attention shifted to supply constraints and rising costs ahead rather than the results just posted.
A record quarter across the board
Earnings per share rose 29% year over year to $2.02. Net income climbed 27% to $29.8 billion. iPhone revenue jumped 22% to $54.3 billion, and Mac revenue grew even faster, up 29%. Gross margin expanded to 50.1%, up from 46.5% a year earlier, though the quarter included an $0.11-per-share benefit from tariff refunds; excluding it, earnings per share still grew about 22%.
According to Cook, in his final earnings release as CEO: "our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services". Ternus takes over as CEO on Sept. 1, and Cook becomes executive chairman.
Services growth cools even as it sets a record
Services revenue rose about 12% year over year to $30.7 billion, a June-quarter record and the segment's 12th straight quarter of double-digit growth. Even so, it was the slowest growth of Apple's three biggest revenue categories, and services is the high-margin business behind the stock's valuation premium.
Supply costs cloud the outlook
Apple warned that supply constraints will weigh on iPhone, iPad, and Mac in the September quarter. Cook said the company expects to pay higher memory costs than it just did, as memory prices rise industrywide. Apple guided September-quarter gross margin to 47% to 48%, down from the 50.1% it just reported.
Shares came into the report up about 65% from their 52-week low and trading at about 40 times earnings, near their record high.
Source: Fool
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