Apple’s new CEO John Ternus appears to have passed an early test since facing sky-high expectations upon taking over the tech giant from longtime leader Tim Cook in September.
In its first earnings report under Ternus, the company beat revenue expectations but came up short on iPad sales, as Apple has weathered a slew of challenges this year – including a global crunch in memory chip supplies – which prompted Apple to raise prices of Macs and iPads.
The iPhone maker logged $114.48 billion in revenue vs. $113.39 billion that Wall Street expected – a 12% jump from $102.5 billion it notched a year earlier, Apple said Monday.
Wall Street was eagerly awaiting the results, watching iPhone revenue in particular after Apple jacked up prices on the product by $100 – reflecting a worldwide shortage of memory and other components.
Revenue for the iPhone hit $57.58 billion, topping estimates of $56.54 billion, according to data provider LSEG. The results include eight days of new iPhone 18 Pro sales, one of the latest phones released by the iconic brand.
“Stronger than expected iPhone numbers with China the star of the show is credit to the Apple upgrade cycle playing out with iPhone 17 and now iPhone 18. This has been a safety stock in this tech storm and the results speaks to an impressive quarter,” Dan Ives, a partner and senior managing director at investment bank Yorkville Ives & Co, told The Post.
Apple shares were trading more or less flat after the market closed Monday.
Investors will have to wait for a financial update for Apple’s new flagship device – the iPhone Duo, which has an eye-watering price tag of nearly $2,000 – because it didn’t hit store shelves until the quarter was over.
That device – which features a foldable screen – drew massive crowds and overnight lines outside Apple stores across the country.
The Duo had a rocky start when customers reported cracks and bright lines appearing near the hinge — in some cases within hours of unboxing the pricey gadget. Apple recently promised to replace affected devices.
“We’re closing the year with our most ambitious lineup yet. That includes the iPhone Duo, the most transformational iPhone since the original, alongside iPhone 18 Pro and iPhone 18 Pro Max, our most powerful iPhones yet,” Ternus said in a statement.
He said he couldn’t predict when Apple would reach enough Duo supply to meet demand. The statement didn’t address the problem of cracks.
Oppenheimer analyst Martin Yang told the Wall Street Journal that shares of Apple trade at 36 times next year’s expected earnings, a premium to the broader market — and a contrast to its earnings, which are expected to grow only 1%, which is more sluggish than other tech giants.
Apple CEO Tim Cook told Reuters over the summer that the main supply constraint that Apple had during the third quarter was an industry shortage of advanced chipmaking technology used to produce the Apple Silicon chips at the heart of its devices.
Apple’s supply chain strain came as hundreds of billions of dollars has been pumped into a massive build out of AI data centers – which has caused conflict with its longtime memory supplier Micron. Cook previously alluded to shortages of both memory chips and the main processor of iPhones supplied by Taiwan Semiconductor Manufacturing Co.
Ternus has been weighing an overhaul of the company to focus its engineering operations, introduce products more frequently and to create a leaner organization, Bloomberg News reported in September.