Apple's shares slumped after fiscal third-quarter results, even as iPhone sales jumped and revenue hit a new all-time high. The report marked Tim Cook's last earnings call as CEO, and investors focused on guidance pointing to slower growth and thinner margins next quarter.
Apple's shares slumped in after-hours trading Thursday and remained down 7% shortly before Friday's trading session opened. The report doubled as Tim Cook's last earnings call as CEO, with the outgoing chief set to transition to executive chairman on Sept. 1.
iPhone demand drives a record quarter
The quarter itself notched just over $109.4 billion in revenue for the three months ended June 30, up 16% year over year and a new all-time high. Behind that growth, iPhone sales jumped 22% to just below $54.3 billion. That take made up 69% of total product revenue. Apple attributed the surge to sustained demand for the iPhone 17, and pointed to its decision to pack advanced features into standard models rather than reserve them for the pricier Pro versions as one factor behind that demand.
Profit beats forecasts, Apple guides for a slower quarter
Net income reached nearly $29.79 billion, or $2.02 per share, a 27% increase from a year earlier. Both figures topped consensus analyst estimates of $108.86 billion in revenue and $1.89 in earnings per share.
Yet Apple guided for fourth-quarter revenue growth of 9% to 11% year over year, citing foreign-exchange headwinds and supply constraints on memory components that will weigh on production. The company also projected a gross margin of 47% to 48% for the current quarter, down from a level that was just over 50% in the third quarter. Investors were concerned that growth and margins could soften in the following quarter.
Apple's stock was trading at $333.43, down 1.41% on the day. The company carried a market capitalization of $4.9 trillion. Shares have ranged between $201.50 and $344.57 over the past 52 weeks.
Until the memory supply constraints ease, Apple will feel pressure to lift growth and margins back toward its third-quarter pace.
Source: The Motley Fool
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