Apple shares fall as China revenue misses estimates

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Apple shares fall

Highlights

Apple beat forecasts with $114.48 billion in revenue.
iPhone sales exceeded estimates, but China revenue missed.
Apple shares fell 3.79% to $325.51 in premarket trading.

Apple earned $2.10 per share on revenue of $114.48 billion, exceeding Wall Street forecasts of $2 and $113.46 billion, respectively. Revenue increased from $102.46 billion a year earlier, while earnings per share rose from $1.85. As Yahoo Finance reported, strong iPhone sales helped offset disappointing performance in China during the company's first earnings report under CEO John Ternus.

iPhone and Mac sales drive quarterly growth

iPhone revenue reached $57.58 billion, beating analyst expectations of $56.48 billion and reinforcing the smartphone's importance to Apple's business. Mac sales also exceeded forecasts, generating $10.79 billion compared with estimates of $9.69 billion. The results showed continued demand for Apple's core hardware products despite supply constraints and higher manufacturing costs.

The company's services division generated $31.57 billion, narrowly missing expectations of $31.58 billion. Wearables contributed $8.3 billion, while iPad revenue reached $6.23 billion. Greater China remained the main weakness, with revenue of $17.54 billion falling short of the projected $18.75 billion. The regional miss raised concerns about Apple's ability to maintain growth in one of its most important international markets.

New CEO faces rising costs and supply constraints

The earnings announcement marked the first quarterly report since John Ternus replaced Tim Cook as chief executive on September 1. Ternus inherited a company delivering strong sales but facing increasing pressure from component shortages and higher production expenses. Global demand for memory chips has pushed prices higher, creating additional challenges for hardware manufacturers.

Apple acknowledged that memory costs increased compared with the June quarter. Supply limitations could also affect Mac and iPad availability, while investments in artificial intelligence features, including Siri, add to operating expenses. These pressures have increased investor attention on profitability, even as revenue continues to grow.

Apple shares fall as investors reassess growth expectations

Apple's latest results highlighted the gap between strong product demand and the costs required to sustain it. The company entered earnings season after gaining approximately 25% in 2026, leaving investors sensitive to signs of weaker regional performance or narrowing margins.

China's revenue shortfall and higher component expenses could weigh on sentiment despite the earnings beat. Investors will now focus on whether Apple can maintain hardware sales, manage supply shortages, and protect profitability as its AI investments expand.

In the latest premarket reading, Apple shares fell 3.79% to $325.51, a decline of $12.81. The drop suggests investors were placing greater weight on China's weaker performance and cost pressures than on the stronger quarterly earnings figures.

We also reported Apple launches iPhone Duo as it tests foldable phone demand.

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