Apple beats forecasts, but shares fall in after-hours trading
The company exceeded forecasts for both profit and revenue. iPhone revenue totaled $54.25 billion, surpassing expectations. iPad and services revenue were slightly below forecasts. This marks Tim Cook's final report as Apple CEO.
Technology giant Apple is releasing its financial results for the third quarter of 2026, according to its fiscal calendar. Apple reported revenue of $109.4 billion, exceeding analyst forecasts of $108.96 billion. Earnings per share were reported at $2.02, surpassing the anticipated $1.89 per share.
Apple stock (333.43, -1.41%) is reacting in after-hours trading with a 4% decline.
iPhone sales jumped by 21% for the quarter, beating Wall Street forecasts of approximately 19%, and continued the strong momentum of the iPhone 17 series. Sales of Apple's core product strengthened over the past year following software design changes and the addition of a more affordable option to the smartphone lineup.
Conversely, revenue from iPad and services fell slightly short of expectations. iPad revenue totaled $6.19 billion, compared to the expected $6.92 billion. The services division recorded $30.74 billion in revenue, slightly below the $31.22 billion forecast, while the wearables segment posted $7.88 billion, slightly above expectations.
Apple's net profit rose to $29.79 billion, or $2.02 per share, compared to $24.43 billion or $1.57 per share in the same quarter last year. The gross margin stood at 50.1%, with the company noting that results were influenced by customs refunds of approximately 11 cents per share.
Apple ended the quarter with a cash balance of $146.5 billion but did not provide an official forward-looking forecast.
In the background, the company is managing a global memory chip shortage and increasing competition for manufacturing capacity. CEO Tim Cook recently described the situation as a "hundred-year flood," and the shortage has already forced the company to raise prices for Mac computers and iPads. While Apple has not announced a price hike for the iPhone, analysts expect such a move could occur this year.
Simultaneously, Apple is preparing to launch a new version of Siri based on Google technologies alongside the new iPhone series in September—a significant test for the company as investors express concerns regarding its position in the AI race.
Despite these challenges, Apple's revenue has grown by more than 15% for the third consecutive quarter.
In a conversation with the Wall Street Journal, Tim Cook explained that while the company aims to protect its customers, the combination of record demand for artificial intelligence and supply chain shortages has made the situation unsustainable. The new iPhone is also expected to see a price increase due to these conditions.
