Apple Beats Fiscal Q4 Estimates but Stock Falls on China Miss and Grim Margin Outlook

Apple reported fiscal fourth-quarter revenue of $114.48 billion, up 12 percent year over year, beating analyst estimates of $113.39 billion, while earnings per share came in at $2.10, topping the $1.99 consensus. iPhone revenue of $57.58 billion also exceeded forecasts, driven by strong demand for the iPhone 18 Pro lineup and higher selling prices, and Services revenue hit an all-time record of $31.6 billion. Despite the headline beats, shares fell in after-hours trading.

The selloff was driven by two concerns. Greater China revenue of $17.54 billion missed analyst estimates of roughly $18.75 billion by about $1 billion. And Apple's gross margin guidance for the December quarter came in at 45 to 46 percent, well below both the 47.9 percent posted in the September quarter and the 46.3 percent analyst estimate, as CFO Kevan Parekh cited accelerating memory and chip costs that management expects to continue rising into next year.

The results mark the first earnings report under new CEO John Ternus, who took the helm from Tim Cook in September. Analysts at D.A. Davidson flagged that investors are also watching for the tail end of the largest iPhone upgrade cycle in five years and what that means for near-term demand. Apple guided for December-quarter revenue growth of 7 to 10 percent year over year, ahead of the 6.1 percent analyst estimate, but the margin compression forecast overshadowed that upside. Most analysts said they remain bullish on the stock despite the near-term pressure.