Apple earnings preview: Ternus faces first call as Mag 7 stumbles
Apple reports fiscal fourth-quarter results on Monday, with analysts expecting about $113.3 billion of revenue and $1.99 a share in John Ternus's first call as chief executive.
After a bruising week for big tech, Monday's results from the world's most valuable listed company carry more weight than usual. This Apple earnings preview covers what Wall Street expects when the iPhone maker reports after the close on November 2, the first quarterly call led by chief executive John Ternus, with chief financial officer Kevan Parekh.
What happened
In July Apple guided September-quarter revenue growth of 9% to 11%, which implies about $111.7 billion to $113.7 billion compared with $102.5 billion in the year-ago quarter, iThinkDifferent reported. Consensus sits near $113.3 billion and $1.99 a share, close to the top of that range; Regards of Wallstreet's average of 27 estimates is $113.4 billion and $1.98. Apple also guided iPhone growth in the mid-teens, held back by supply, and a gross margin of 47% to 48% that includes about one point from tariff refunds.
The quarter, which ended September 26, captures just nine days of iPhone 18 Pro demand and no Duo revenue at all, because that model launched on October 23 at $1,999. Memory is the main cost worry: IDC estimates memory prices are up about 350% from last year, according to iThinkDifferent, and Apple expects them to keep rising through year-end.
Why it matters
The bar is high. The stock is up 28% this year, the best performer among the Magnificent Seven, CNBC noted, and it has been trading places with Nvidia for the title of most valuable company. That makes Apple the stress test for the AI-spending selloff, after the reports from Alphabet and Amazon discussed in our Alphabet earnings miss and Amazon Q3 miss coverage.
Analysts are not uniformly upbeat. Bank of America removed the stock from its US1 list of top ideas on Friday, citing margin risk from a staggered iPhone launch, and Loop Capital recently cut its rating to Hold and modeled 79 million iPhones for the December quarter against 85 million on the Street.
Services, which grew 12% to $30.7 billion last quarter, will matter for margins too, given slower mobile gaming and App Store rule changes in some countries.
Last quarter set a demanding comparison. Apple's June-quarter revenue rose 16% to $109.4 billion, with earnings of $2.02 a share against a $1.89 consensus, iThinkDifferent recalled. iPhone revenue rose 22% to $54.3 billion, Mac 29% to $10.4 billion, and gross margin reached 50.1%, about two points of it from tariff refunds. This Apple earnings preview therefore starts from a lower margin guide, so investors will judge gross margin against the 47% to 48% range rather than last quarter's 50.1%.
What's next
The reaction will hinge on December-quarter guidance and on how many iPhone Duo units Apple says it can build, with consensus near $153.4 billion of revenue for that period. iThinkDifferent's earnings guide sets out the July targets.
Results are due around 4:30 p.m. ET, with the call at 5 p.m. ET. For anyone using this Apple earnings preview as a checklist, the three numbers to watch are gross margin against the 47% floor, the iPhone growth rate and the holiday outlook.
Palantir reports on the same evening, so Monday doubles as a referendum on AI demand from two very different angles.
This article is for information only and is not investment advice.