Apple posted fiscal third-quarter revenue above analyst expectations but warned that memory chip prices are rising at an unprecedented pace. Its shares fell in after-hours trading as the company said the higher costs will squeeze margins.
Apple warned investors that higher memory chip prices will eat into its profit margins, and the stock slipped even though results beat forecasts. The company is competing with datacentres to secure chip supplies.
According to the Guardian, John Ternus, Apple's new CEO, told a conference call on Monday: "What we’re seeing with memory pricing right now is unprecedented"
Memory costs to climb further in Q4
Ternus predicted that memory costs in the fourth quarter would be even higher than in the previous three months. Demand for memory chips from AI datacentres has surged and driven up prices.
Apple has already responded on pricing. Ternus said the iPad and MacBook price increases in June, followed by iPhone increases in September, offset some of the impact.
Apple's shares fell 2.75% in after-hours trading on Wall Street.
Revenue rises 12% and beats estimates
Apple earned $30.71 billion, or $2.10 a share, in the July-September period, up 12% from $27.47 billion, or $1.85 a share, a year earlier. The company said its earnings included five cents a share from tariff refunds.
Revenue rose 12% to $114.5 billion from $102.5 billion. However, analysts polled by FactSet had expected earnings of $1.99 a share on revenue of $113.4 billion.
The results came as Alphabet, Amazon and Intel reported disappointing quarterly results. Emarketer analyst Jacob Bourne said record iPhone revenue and strong growth in China showed the resilience of Apple's business.
Source: The Guardian
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