Apple reports $114.5 billion in fiscal Q4 revenue amid rising chip costs

Apple reported fiscal fourth-quarter revenue of $114.5 billion, according to a report by CNBC. This figure exceeded the $113.4 billion in revenue that analysts were, on average, expecting, according to a poll by FactSet.

Financial Performance

Apple's revenue rose 12% to $114.5 billion from $102.5 billion in the previous year, according to The Guardian. The company earned $30.71bn (£22.89bn), or $2.10 a share, in the July-September period, which was up 12% from $27.47bn, or $1.85 a share in the equivalent period a year earlier. Apple stated its earnings included five cents a share from tariff refunds.

Ben Barringer, the head of technology research at Quilter Cheviot, noted that "Revenues were up 12%, driven primarily by iPhone sales and strong sales of Mac Mini, which users can use to apply agentic AI. China growth was robust which is pleasing to see, while iPad and wearables disappointed with services growing but lower than the group average at 10%."

Supply Chain and Margin Concerns

Despite the revenue growth, Apple warned of an "unprecedented" rise in memory chip prices. John Ternus, Apple’s CEO, told a conference call on Monday that "What we’re seeing with memory pricing right now is unprecedented," and he predicted that memory costs in the fourth quarter of this year would be even higher than in the previous three months.

According to The Guardian, demand for memory chips from AI datacentres has surged, contributing to what the tech industry has referred to as "RAMageddon." Ternus stated that Apple's decisions to raise prices for the iPad and MacBook in June, and the iPhone in September, had "provided some offset" for the company.

Market Reaction

Following the earnings announcement, Apple's shares fell in premarket trading. CNBC reported that Apple dropped 4.4% in premarket trading on Tuesday. The Guardian reported that Apple's shares were down 2.75% in after-hours trading on Wall Street.

Why it matters

• Apple's revenue exceeded analyst expectations, driven by iPhone and Mac Mini sales.
• Rising memory chip costs due to AI data center demand are expected to impact profit margins.
• Apple's stock price declined in both premarket and after-hours trading following the report.

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Sources

• cnbc.com: Apple and Palantir stocks fall in premarket trading after earnings
• theguardian.com: Apple warns of ‘unprecedented’ rise in memory chip prices | Apple | The Guardian

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.