Apple stock falls 4.43% following John Ternus's debut earnings report
- John Ternus delivered his first earnings report as Apple CEO on November 2, 2026.
- Apple stock fell as much as 4.43% in after-hours trading following the results.
- iPhone revenue reached a record $57.58 billion for the September quarter.
- CEO John Ternus described current memory chip costs as unprecedented.
Apple shares fell in after-hours trading on Monday, 2 November 2026, following the first earnings report delivered by new chief executive John Ternus. Ternus assumed the role on 1 September 2026, succeeding Tim Cook after his 15-year tenure.
The company stock closed at $338.32 on Monday, a decline of 1.83%. Shares dropped further after the earnings call, with one report showing a decline to $335.00.
Investors reacted to a weak margin forecast, rising memory costs, and slower services growth. Before the earnings results were released, Apple shares had fallen 1.39% on Monday. Despite the recent decline, Apple shares have gained approximately 27% in 2026, outperforming several major technology companies.
Record revenue and earnings per share for fiscal 2026
Net income for the full year reached $132.175 billion, an increase of approximately 18%.
For the fourth quarter, Apple reported revenue of $114.5 billion, according to beincrypto.com, or $114.48 billion, as reported by siliconangle.com. Cxotoday.com reported revenue of $114.8 billion for the same period. This result represents a 12% increase compared to the previous year.
Analysts had projected revenue of $113.39 billion or $113.4 billion for the quarter. Earnings per share were $2.10, which surpassed the analyst estimate of $2.00 and the Wall Street target of $1.99.
Net income for the quarter reached $30.71 billion, an increase from the $27.46 billion reported one year earlier. Services revenue reached $31.57 billion, which aligned with analyst forecasts.
Unprecedented memory costs pressure profit margins
This follows a gross margin of 47.9% reported in the fourth quarter. The fourth-quarter figure included a one percentage point benefit from non-recurring tariff refunds.
CEO John Ternus described the current memory cost situation as "unprecedented". He noted that the expansion of AI infrastructure has increased demand for DRAM and NAND Flash memory, which has raised hardware procurement expenses.
Memory chip costs are under pressure due to demand from AI data centres. SK Hynix predicts a supply shortage will last until 2030.
One-off tariff refunds previously added $0.05 to earnings per share and one percentage point to the gross margin.
Mixed performance across iPhone, Services, and hardware units
Apple exceeded Wall Street's profit and sales expectations during John Ternus' inaugural quarter as CEO. iPhone revenue reached a record for the September quarter at $57.58 billion, a 17% increase from the previous year. This result surpassed the $56.54 billion consensus estimate.
The revenue figure for the iPhone included only nine days of sales for the new iPhone 18 Pro models. Growth slowed from the 22% rate observed in the previous quarter.
Services revenue reached $31.57 billion, which was slightly below the $31.58 billion forecast. This represented the slowest growth rate for the unit since September 2022.
The Mac division reported revenue of $10.79 billion, a 24% annual increase that exceeded the $9.61 billion forecast. Mr Ternus attributed this result to supply constraints and difficult year-over-year comparisons.
Sales in this category dropped by 8%.
Greater China revenue misses and iPhone Duo supply constraints
Greater China revenue reached $17.54 billion, a 21% increase, but fell short of the $18.58 billion consensus estimate.
Apple released several new products including a smart home hub, touchscreen MacBook laptops, and the iPhone Duo foldable smartphone.
The iPhone Duo began shipping on 23 October 2026, though CEO John Ternus said demand currently exceeds supply.
Bank of America estimated average delivery waits of 79 days for the device, with shipments extending into January.
IDC analyst Nabila Popal expects demand to exceed supply.
Analyst sentiment on AI strategy and market valuation
Oppenheimer analyst Martin Yang noted that Apple is trading at approximately 36 times its expected earnings for next year.
Options traders had priced in a potential stock swing of approximately 3.5%, according to Pepperstone.
Revenue growth projections for the December quarter
CFO Kevan Parekh projected revenue growth between 7% and 10% for the current quarter, which is lower than the 11.4% growth expected by Wall Street analysts.
This projection covers the current quarter, which includes the Christmas sales period.
Analysts expect earnings of $2.88 per share for the December quarter.
Government warnings regarding iPhone spyware
German Digital Minister Karsten Wildberger confirmed that Apple alerted certain lawmakers and ministers about mercenary spyware targeting their devices.
Germany’s Federal Office for Information Security instructed government officials to assume their iPhones have been compromised by sophisticated spyware.
Frequently Asked Questions
- Apple's stock drops as new CEO John Ternus delivers his first earnings call - SiliconANGLE (siliconangle.com)
- Apple Beats Q4 Earnings Estimates; But Stock Prices Drop on Weak Margin Forecasts (cxotoday.com)
- Apple earnings: what to expect from John Ternus' first report (invezz.com)
- Apple Beats Earnings in Ternus' First Quarter: Why Is the Stock Falling? (beincrypto.com)
- Apple Stock Drops on Memory Costs and Weak Margin Forecast Despite An Earnings Beat: Is It a Good Buy Now? | TOPONE Markets (top1markets.com)
- Apple Sales Growth Slows as China Revenue Falls Short of Estimates - Bloomberg (bloomberg.com)
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