Apple reported its fiscal 2026 fourth-quarter earnings, marking the first earnings announcement under new CEO John Ternus, who took over from Tim Cook on 1 September. Overall, the company showed strong growth with revenue exceeding analyst expectations and setting record quarterly revenue and earnings per share for September.However, despite better-than-expected results, Apple’s stock fell about 3% in after-hours trading following a forecast for next quarter's gross margin that was below market expectations. This outlook was pressured by rising costs for memory and electronic components.
Apple’s first quarter under Ternus generated revenue of $114.48 billion.
By product segment, the iPhone remains the company’s main revenue engine, generating $57.58 billion, surpassing analyst estimates of $56.54 billion. Mac revenue was $10.79 billion, also beating the estimated $9.61 billion.
iPad revenue reached $6.23 billion, below the market forecast of $6.7 billion, and the Wearables, Home and Accessories segment brought in $8.3 billion, under the expected $9.06 billion. Meanwhile, the Services business hit an all-time high revenue, reflecting growth in this important source of income beyond hardware sales.
For the entire fiscal 2026 year, Apple posted a record total revenue of $479 billion. The company generated $28 billion in operating cash flow in the latest quarter and returned $28 billion to shareholders.
Market concerns focus on margins falling short despite revenue growth.
Conversely, Apple forecasts a gross margin of 45-46%, below analysts’ estimate of 46.3%, indicating challenges in maintaining profitability despite ongoing revenue growth.
One major factor is the global shortage of memory and competition for electronic components, which has driven up production costs. Apple disclosed that memory costs rose in the most recent quarter compared to June.
Earlier, Apple raised prices on several products since June due to supply challenges, especially for memory and components. The iPhone price increased by $100 per device to help offset higher costs.
John Ternus acknowledged that Apple reluctantly raised prices to cope with rising component costs. Additionally, the latest quarter’s earnings benefited from tariff refunds, which boosted gross margin by about one percentage point and increased EPS by $0.05.
Watch for iPhone Duo to drive year-end sales.
John Ternus stated that Apple is closing the fiscal year with its most ambitious product lineup ever, including the iPhone Duo, which the company views as the most significant iPhone innovation since the original model, along with the iPhone 18 Pro and 18 Pro Max offering unprecedented performance.
The company also introduced new home hardware, brought Touch features to Mac for the first time, and plans to promote a new version of Siri AI to enhance products and boost demand during the year-end shopping season.
Ternus said in a statement that Apple just closed its best fiscal year in history, with September quarter revenue growing 12% year-over-year despite supply constraints and currency pressure.
He also told CNBC that, despite past successes, the company has never been more confident that Apple’s best days lie ahead. The board declared a cash dividend of $0.27 per share, payable 16 November 2026 to shareholders of record as of 12 November 2026.
This earnings announcement represents John Ternus’s first test as CEO following Tim Cook. His key challenges include sustaining revenue growth and the strength of the iPhone business while managing costs and preserving profit margins amid fierce competition for technology industry resources — factors critical to investor confidence in the new CEO era.
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