As Growing Chip Costs cloud the Outlook, Apple’s New CEO Will be Put to the Test on Earnings
Monday night in Europe, Apple will reveal its first quarterly earnings numbers since John Ternus replaced Tim Cook as chief executive in September. Investors will be listening closely to what he says about new products, pricing, and AI as well as the company’s guidance for the crucial Christmas quarter.
Analysts expect revenue to rise almost 11% to $113.39 billion (€101.5 billion) and net profit to rise roughly 6% to $29.04 billion (€26 billion), according to LSEG estimates Reuters has seen.
iPhone revenue is predicted to soar 15% to $56.54 billion (€50.6 billion) after soaring nearly 22% in the past three months. Services revenue is expected to rise about 10% to $31.56 billion (€28.2 billion), the weakest growth in more than three years. Key questions include how Apple is managing rising memory chip costs and whether further price hikes are on the horizon.
In June, Cook said Apple couldn’t absorb the price spikes and would have to pass some increases on to product prices. TechInsights estimated that the iPhone 18 Pro’s memory and storage components will cost Apple roughly $196 (€175), compared with about $52 (€47) for the iPhone 17 Pro, which would have a substantial influence on profit margins.
Ternus’ comments on Apple’s embrace of AI could also shed light on the company’s services segment, whose growth has slowed, unnerving investors after years of tremendous expansion. In contrast, Apple’s AI funding is minuscule compared to its rivals’ heavy infrastructure spending.
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