Apple’s stock took a steep dive in pre-market trading on Friday, dropping about 7.75% to $307.59 after closing Thursday at $333.43. The tech giant had just announced its fiscal third-quarter results, which beat expectations but hinted at challenges ahead.
Despite reporting revenue of $109.42 billion, surpassing analyst estimates of $108.65 billion, and net income rising to $29.79 billion or $2.02 per share, investors were rattled by the company’s cautious outlook. The earnings included an 11-cent-per-share benefit from tariff rebates, complicating direct comparisons with analyst projections.
iPhone sales surged 22%, bringing in $54.25 billion, slightly above predictions, while Mac revenue jumped to $10.35 billion, far exceeding the expected $8.74 billion. Other segments painted a mixed picture: wearables barely beat forecasts at $7.88 billion, but iPad sales lagged at $6.19 billion, missing the $6.92 billion estimate. Services revenue also fell short at $30.74 billion against $31.22 billion anticipated.
The company reported a gross margin of 50.1%, lifted by tariff benefits, compared to the 47.9% projected by analysts. Apple finished the quarter holding $146.52 billion in cash, underscoring its solid balance sheet despite supply chain pressures.
Market focus shifted from the strong quarterly figures to Apple’s revenue growth forecast for the next quarter. The company expects a 9% to 11% rise, below analysts’ consensus of roughly 12%. Supply constraints, including the ongoing global shortage of memory chips and fierce competition for manufacturing capacity, played a key role in the tempered guidance. This supply crunch has already forced Apple to hike prices on some Mac models.
The cautious forecast overshadowed the earnings beat, prompting investors to sell off shares aggressively despite the strong core performance.
This material is for informational purposes only and does not constitute financial advice.
