Apple beats quarterly estimates, but margin guidance falls short of forecasts

what happened

Apple shares fell about 2% in extended trading on Monday and slipped further in premarket trading on Tuesday, despite better-than-expected results, according to Seeking Alpha. Revenue for the fiscal fourth quarter ended September 26 rose 12% to $114.48 billion, and earnings per share came in at $2.10. iPhone sales reached $57.58 billion against Wall Street's estimate of $56.49 billion, while Greater China revenue jumped 21% to $17.54 billion but missed the $18.75 billion forecast.

For the coming period, Apple expects revenue growth of 7% to 10% year over year, above the 6% analysts had penciled in. Gross margin, however, is seen at 45% to 46%, below the 46.9% Wall Street expected. The company blamed higher memory costs and expenses tied to the ramp-up of its Siri AI features.

why it matters

The mixed report matters well beyond one stock, because Apple carries heavy weight in major US indices. Strong iPhone demand and upbeat revenue guidance support the bullish case, while margin pressure and weakness in China remind investors that AI product rollouts carry costs. The balance between these forces will shape how the market reacts to the shares and to funds that hold them.

market impact

Apple and broader US indices: strong revenue against weaker margins and China, so pressure on shares is mixed

• ↔Apple shares mixed — strong revenue and growth outlook offset by weaker margins and China sales
• ↔Nasdaq 100 index mixed — Apple's large weight, but iPhone strength and cost pressure pull in opposite directions

tags

instruments