Tim Cook's final fiscal quarterly earnings report as Apple CEO produced the kind of stock selloff that the executive would rather not serve as his goodbye message after 15 years at the helm of Apple. Despite reporting a strong 22% year-over-year increase in iPhone sales during the fiscal third quarter to $54.25 billion, the stock was down $21.43, or 6.43%, in after-hours trading to $312. The iPhone sales reported by Apple also topped Wall Street estimates that were looking for Apple to report $53.86 billion in handset sales during the quarter.
Apple iPad sales declined 5.92% to $6.19 billion from $6.58 billion the previous year. Wearables, Home and Accessories, the category that includes Apple Watch and AirPods, to mention a couple of products, saw sales rise 6.47% in the quarter to $7.88 billion from $7.40 billion.
Apple reported a strong quarter for its Services unit
Apple's second-largest business segment after the iPhone is its Services unit. For the fiscal third quarter, sales soared 12.09% to $30.74 billion from $27.42 billion. Apple also showed annual increases in sales for all of its regional areas. For example, sales in the Americas were up 11.12% year-over-year to $45.78 billion. European revenue increased a whopping 22.41% to $29.40 billion.
Apple grew its sales in China during the fiscal third quarter
A very important market for Apple is China. For the fiscal third quarter, sales in this country increased a strong 22.45% over last year's fiscal Q3 to $18.82 billion. Sales in Japan totaled $6.55 billion for the three months, up 13.35%, and sales for the rest of Asia Pacific hit $8.87 billion for a 15.61% decline.
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Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment. At WWDC 26, we were thrilled to introduce the all-new Siri AI, alongside all of Apple’s latest software innovations and important new child safety features.
Tim Cook, Apple CEO
Apple's diluted earnings received an 11-cent share boost from tariff refunds
During the fiscal third quarter, Apple's top line was $109.42 billion. Net income amounted to $29.79 billion, and basic earnings per share of $2.03 topped last year's $1.57 by 29.30%. Diluted earnings per share, which assume conversion of all options and convertible debt into common shares, came to $2.02, up 29% year-over-year. This figure includes $0.11 per share from tariff refunds. Gross margin of 50.1% was actually improved by 2 percentage points from tariff refunds.
Apple's shares plunge over $20 after this report was released
As we mentioned in the first paragraph, the stock is being hammered in after-hours trading. After a rough regular trading session that saw the shares fall $4.76, or 1.41%, to $333.43, once the fiscal third quarter numbers were released by Apple, the stock had trouble finding a bid, plunging $21.43, or 6.43%, to $312. This decline comes days after Apple hit a market valuation of $5 trillion for the first time, becoming only the second US publicly traded outfit to reach that figure after Nvidia.
iri AI now delivers improved responses. | Image by PhoneArena
Apple released the iOS 27 beta update during the fiscal third quarter, giving many iPhone users the chance to test out the new Siri AI. As we said at the time, iPhone users will love that Siri visited the Wizard and got a brain. Apple continues to improve Siri AI with every iOS 27 Beta update.
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Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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