Apple stock falls as guidance points to supply and currency pressure
Apple beat third-quarter estimates, but shares fell after it forecast slower growth tied to memory costs, supply limits and foreign exchange.
By Wei-Lin Zhao · AI Correspondent
· 3 min read
Apple stock guidance overshadowed a stronger-than-expected third quarter, with shares down almost 6% in late trading after the company said supply constraints and currency pressure would weigh on the current period. Apple reported $109.42 billion in revenue, up 15% from a year earlier, and adjusted earnings of $2.02 per share, both ahead of Wall Street estimates cited in the report.
Net income rose to $29.79 billion from $23.43 billion a year ago. The headline growth came from iPhone sales, which increased 22% to $54.25 billion, ahead of analyst expectations. Chief Executive Tim Cook attributed the performance to demand for the iPhone 17 line and a strong upgrade cycle.
Why did Apple stock fall after earnings?
Investors focused on Apple’s outlook rather than the quarter just ended. Chief Financial Officer Kevin Parekh said Apple expects revenue growth of 9% to 11% in the current quarter, below the 12% consensus growth estimate, and said iPhone revenue would be affected by supply limits and unfavorable foreign exchange rates.
Parekh said currency could reduce fourth-quarter growth by as much as 2.5%. He also said Apple continues to see high iPhone demand and expects handset revenue to grow in the mid-teens year over year, leaving the issue less about demand and more about component availability and input costs, according to the company.
Cook told analysts Apple is facing a global memory shortage and higher chip-related costs. He said memory prices have already increased for Apple over the past three quarters and are expected to rise further. Apple has raised prices on Macs and iPads, according to the company, while Cook declined to say whether iPhone prices will move higher.
The company said it has memory inventory that can absorb some of the pressure, but Cook indicated the market remains constrained. He pointed to the concentration of supply among Samsung Electronics, Micron Technology and SK hynix, and said the memory market needs more capacity beyond those three suppliers.
What else moved in Apple’s quarter?
Mac revenue rose 29% to $10.35 billion. Cook said sales benefited from the lower-cost MacBook Neo, which uses the A18 Pro chip from the iPhone 16 Pro, as well as demand for MacBook Pro systems. Apple raised prices across its Mac lineup late in the quarter, citing the memory crunch and higher chip manufacturing costs.
iPad revenue fell 6% to $6.19 billion, missing the $6.92 billion analyst forecast. Cook said the comparison was difficult because the year-earlier period included a sales lift from a lower-cost iPad launch.
Services revenue grew 12% to $30.74 billion, also below the $31.22 billion expected by analysts. Cook attributed that shortfall to foreign exchange pressure and said advertising, the App Store, AppleCare, music, video, cloud services and payments all grew. Apple said it now has 1.5 billion paid subscriptions, including iCloud and third-party app subscriptions through the App Store.
The call also served as Cook’s last earnings call as chief executive. John Ternus, Apple’s hardware chief and a 25-year company veteran, is set to become CEO on Sept. 1, with Cook moving to executive chairman. Ternus spoke only briefly and gave little detail on strategy, saying Apple is focused on its plans.
Apple is preparing to launch new iPhones in September and a redesigned Siri using Google’s Gemini AI technology. Valoir analyst Rebecca Wettemann said the market has not heavily penalized Apple for lacking a clear AI story, but warned the company could miss growth tied to AI if its product execution falls short. Emarketer analyst Jacob Bourne said Apple’s results support its lower-capex approach to AI, while its installed base gives it distribution advantages.
This story draws on original reporting from SiliconANGLE.
