Apple shares slide as 'unprecedented' memory costs squeeze its margin forecast

Apple shares fell about 4% in premarket trading on Tuesday after the company warned that soaring memory-chip prices would squeeze its profitability, Reuters reported. It was John Ternus’s first earnings report as Apple’s chief executive.

The quarter

• Revenue for the September quarter rose 12% year on year to a record $114.5 billion; services brought in $31.6 billion (+10%).
• Net income was $30.7 billion and diluted earnings per share $2.10.
• Gross margin was 47.9%, down from 50.1% in the June quarter, and that figure included about one percentage point of help from tariff refunds.

The outlook

For the December quarter Apple expects revenue growth of 7–10%, above the average estimate, but a gross margin of only 45–46%, below the 46.3% analysts expected, according to LSEG data cited by CNBC. Finance chief Kevan Parekh attributed this mainly to higher memory costs and spending on the rollout of the new AI-powered Siri.

Ternus called memory pricing “unprecedented” and said Apple expects purchase prices to keep rising beyond the holiday quarter. Price increases on Macs, iPads and iPhones earlier this year provide only a partial offset.