Apple: $114.5 billion in one quarter, the record that hides a hole in China

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The iPhone brought in $57.58 billion, 17% more than a year earlier. Analysts polled by Bloomberg expected only 56.48 billion. The Mac does even better. Its 10.79 billion (+24%) beat the 9.69 billion hoped for. Services took in 31.57 billion, an absolute record, ten million dollars close to the consensus. The iPad (6.23 billion) and accessories (8.30 billion) are both in decline.

Net profit stood at $30.71 billion, compared to $27.47 billion a year earlier. Earnings per share climbed 14% to $2.10, where the market was expecting $2.00. In fiscal year 2026, Apple billed $478.8 billion.

A detail is worth reading in the press release filed with the SEC. The gross margin of 47.9% includes approximately one point of customs duty refunds. This boost also adds $0.05 to earnings per share. Financial director Kevan Parekh also recognized this. Without this check from Washington, the margin would have fallen by around one point from one quarter to the next.

A single line in the geographical table made analysts grimace. Greater China generated $17.54 billion in sales in the quarter. However, the consensus expected 18.75 billion according to Yahoo Finance live. That’s 1.2 billion in shortfall. The region has been worrying investors for two years.

The paradox lies in the basis of comparison. China had only reported 14.49 billion a year earlier, a low. The increase displayed therefore reaches 21%. Apple thus claims a record for a September quarter, driven by the iPhone and the Mac. But Wall Street had anticipated even better and only retained the gap. The Chinese market remains the one where Huawei competes most head-on for the high-end market with Apple.

The big subject of the November 2 conference was, in one word, memory. “What we are currently seeing on memory prices is unprecedented,” John Ternus told investors. Artificial intelligence data centers are sucking up the world's production of DRAM and flash memory. Apple pays the ticket like everyone else. The boss calculated the bill. Between June and September, the group's purchasing commitments from its suppliers jumped by $33 billion. Inventories swelled from $5.7 billion to $14.5 billion in one year.

The forecasts for the Christmas quarter bear this out. Apple is targeting revenue growth of 7 to 10% year-on-year. Services are expected to grow by 8 to 9%. It would be the best quarter in its history. However, the gross margin should fall to between 45 and 46%, compared to 47.9% over the past quarter. And this despite the price increases in June and September on several products. Operations director Sabih Khan warns that Mac and iPad will be missing from shelves during the holidays due to lack of available memory.

Machine-translated from French