Apple reported strong third-quarter results, driven by robust sales of iPhones and Macs, exceeding market expectations. However, the company's stock fell nearly 8% in after-hours trading due to disappointing growth in its services segment, which includes the App Store and iCloud, and a fourth-quarter revenue outlook that fell short of projections.
On July 30, Apple announced that its revenue for the third quarter of fiscal year 2026 (April to June) increased by 16.4% year-over-year to $109.4 billion, surpassing market expectations of approximately $108.7 billion and marking the highest revenue for a third quarter in the company's history.
Net income rose to about $29.8 billion, a 27% increase from the previous year. Earnings per share (EPS) reached $2.02, exceeding the market forecast of $1.89.
Sales of iPhones and Macs were the primary drivers of this growth. iPhone revenue was $54.3 billion, up 21.7% year-over-year, while Mac revenue increased by 28.7% to $10.4 billion.
In contrast, revenue from services, including the App Store, iCloud, and Apple Music, grew by 12.1% to $30.7 billion but fell short of the market expectation of around $31.2 billion.
Sales in Greater China, including mainland China, Hong Kong, and Taiwan, reached $18.8 billion, a 22.4% increase, recovering to double-digit growth. However, this figure was below the anticipated $19.7 billion.
The increase in profits for the quarter was also influenced by tariff refunds from the U.S. government, which raised the profit margin on products sold by about 2 percentage points, contributing approximately $0.11 to EPS. Excluding the impact of tariff refunds, the actual profit growth was smaller than reported.
Looking ahead, Apple’s revenue forecast for the fourth quarter is expected to grow by about 9% year-over-year, which is lower than the market's anticipated 12% growth.
Apple CEO Tim Cook stated, “Some product supplies are unable to keep up with demand due to a shortage of advanced semiconductor production capacity,” particularly noting supply shortages in the Mac product line.
Investors reacted more sensitively to the underwhelming growth in the services segment and the lower fourth-quarter outlook than to the strong sales of iPhones and Macs. Following the earnings announcement, Apple’s stock fell approximately 8% in after-hours trading.
* This article has been translated by AI.
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