Strong iPhone and Mac sales lifted Apple’s quarterly revenue above expectations, but a softer September-quarter forecast and ongoing chip shortages weighed on investor sentiment.
Apple reported better-than-expected results for its fiscal third quarter, driven by strong demand for iPhones and Macs. However, the company projected slower revenue growth for the September quarter due to ongoing supply constraints, sending its shares down 5.5 per cent in after-hours trading.
For the quarter ended June 27, Apple posted revenue of $109.42 billion, a 16.4 per cent year-on-year increase, exceeding analysts’ expectations of 15.5 per cent growth. Earnings came in at $2.02 per share, including an 11-cent benefit from US government tariff refunds. Even after excluding the refunds, adjusted earnings surpassed Wall Street estimates of $1.89 per share.
Despite the strong quarter, Apple expects September-quarter revenue to grow between 9 and 11 per cent, below analysts’ forecast of around 12 per cent. Chief financial officer Kevan Parekh also projected iPhone revenue growth in the mid-teens, lower than market expectations of nearly 18 per cent, while forecasting gross margins of 47 to 48 per cent.
Chief executive officer Tim Cook attributed the cautious outlook to supply limitations rather than weakening demand. He said shortages of advanced semiconductor manufacturing capacity have made it difficult to secure enough Apple Silicon chips, particularly for Mac products. Cook noted that the company is evaluating alternative memory chip suppliers but said the supply chain currently has limited flexibility to respond to unexpectedly strong demand.
Apple’s iPhone business remained the biggest growth driver, with revenue rising 21.7 per cent to $54.25 billion, marking the company’s strongest third-quarter iPhone performance on record. Mac revenue also climbed 28.7 per cent to $10.35 billion, helped by strong demand for the new MacBook Neo and MacBook Pro models despite higher prices.
In contrast, iPad sales declined 5.9 per cent to $6.19 billion, which Apple attributed to difficult comparisons with last year’s budget iPad launch. Revenue from Greater China increased 22.4 per cent to $18.82 billion, although it fell short of analysts’ expectations.
Apple’s services business, its second-largest revenue segment, generated $30.74 billion, up 12.1 per cent year-on-year, but missed market estimates. Executives said App Store revenue from mobile gaming remained under pressure due to regulatory changes in the US and Europe that allow developers to offer alternative payment options outside Apple’s ecosystem.
Looking ahead, Apple plans to expand its artificial intelligence (AI) offerings following the launch of an upgraded Siri. Cook indicated that some advanced AI capabilities may eventually be offered as premium features through iCloud+ subscription plans.
