Apple shares fell 5.1% in premarket trading Tuesday after the company forecast fiscal first-quarter gross margins of 45% to 46%, missing the 46.3% consensus estimate and dropping from 47.9% in the September quarter. CFO Kevan Parekh attributed the narrowing margins to Siri AI ramp expenses and what he called “unprecedented” memory pricing, which he said will continue to rise beyond December. The margin pressure overshadowed a holiday-quarter revenue growth forecast of 7% to 10%, ahead of the 6.1% estimate, with Services revenue projected to rise 8% to 9%.
To secure component supply, Apple increased its manufacturing purchase obligations by $33B between the June and September quarters and raised inventory 154% year over year to $14.54B. COO Sabih Khan said advanced-node chip constraints are easing as more products shift to 2-nanometer technology, leaving memory availability as the primary December-quarter bottleneck for Mac and iPad. Excluding a 1 percentage point benefit from tariff refunds, September-quarter company and product gross margins fell about 1 point sequentially due to higher memory costs, though June price increases on Mac and iPad and September hikes on iPhone provided a partial offset.
In its first quarterly report under CEO John Ternus, Apple posted fiscal fourth-quarter revenue of $114.48B, up 12% year over year and above the $113.39B estimate, while EPS rose to $2.10, beating the $1.99 consensus and including a $0.05 boost from tariff refunds. iPhone revenue grew 17% to $57.58B, Mac sales rose 24% to $10.79B, and Services reached a record $31.57B, while iPad fell 10% to $6.23B and Wearables dropped 8% to $8.30B. Greater China revenue rose 21% to $17.54B, setting a September-quarter record for the region but missing the $18.55B estimate.