
Apple beats on earnings but new CEO's margin outlook disappoints
The move
Apple reported fiscal fourth-quarter revenue of $114.48 billion, up 12% and above estimates, with EPS of $2.10 versus $1.99 expected; iPhone revenue rose more than 17% to $57.58 billion. It was CEO John Ternus's first earnings call since succeeding Tim Cook, who became executive chairman on Sept. 1. Apple guided next-quarter gross margin to 45% to 46%, below the 46.3% analysts expected, and shares fell about 3% in extended trading. Ternus said Apple "reluctantly" raised prices to offset component costs.
Why it matters
The quarter shows Apple's hardware demand is still strong, but the weaker margin guidance under its new CEO raises the question of whether rising component costs, especially memory, will keep squeezing profits into next year.
The bear case
Revenue and EPS both beat estimates, iPhone sales were strong, and Greater China revenue grew 21%, so the miss was confined to forward margin guidance, not current results.
What to watch
Whether Ternus's AI and Siri plans show up in device upgrades over the holiday quarter.

