CEO John Ternus delivers Apple earnings beat as China and iPad sales miss expectations

Results top forecasts

Apple posted revenue of $114.5 billion for the third quarter, which the company identifies as its fiscal fourth quarter. Analysts had expected $113.46 billion. Earnings per share reached $2.10, compared with estimates of $2.

The company’s gross margin was 47.9%, helped by tariff refunds. Ternus told analysts it was his first time speaking with them as Apple CEO and described the period as a prolific stretch for product launches and innovation.

China and iPad fall short

Revenue in China was $17.54 billion, below analysts’ $18.75 billion forecast. iPad sales totaled $6.23 billion, missing the $6.83 billion estimate. Jesse Cohen, a senior analyst at Investing.com, said Greater China revenue was about $1 billion below forecast and called it a worrying pattern. He also said wearables, home and accessories missed expectations, pointing to weakness beyond China.

Other business lines vary

Mac sales reached $10.79 billion, more than $1 billion above estimates. Services revenue was $31.57 billion, largely in line with forecasts. The iPhone Duo was not available until October, so its sales were not included in the quarter’s results. Wall Street is expected to seek information about the pace of early orders.

Costs challenge new CEO

Ternus is starting his tenure as Apple faces rising memory costs. Memory is a key component in iPhones, iPads and Macs. Supply-chain constraints have also led Apple to raise hardware prices, adding pressure as the company works to sustain sales across its product categories.