Apple Q3 tops forecasts amid supply concerns

Apple (AAPL) delivered fiscal third-quarter revenue of $109.4 billion, representing a 16% increase compared with the same period a year earlier. Diluted earnings per share came in at $2.02, ahead of Wall Street consensus, which had been near $1.89. The performance marked a solid top- and bottom-line outcome for the June quarter, even as some product categories showed mixed trends.

Coverage of the results described broad-based demand strength, with iPhone and Mac highlighted as key drivers of the revenue increase. At the same time, the company faced areas of relative softness, including a decline in iPad revenue and only modest growth in wearables, home and accessories. Services revenue reached a June-quarter record, adding another source of growth.

The quarter’s performance reflected robust hardware demand alongside an expanding services business. Strong iPhone sales were tied to an ongoing upgrade cycle, while Mac revenue benefited from solid demand for both mainstream and higher-end models. These trends helped offset weaker results in tablets and more moderate gains in wearables-related products.

Profitability was supported by a gross margin that was reported above 50% for the period. Tariff refunds played a role in this outcome, contributing roughly $0.11 per share to earnings and lifting gross margin by about two percentage points. This one-time benefit added to the underlying strength from product mix and scale.

Looking ahead to the September quarter, management guided to year-over-year revenue growth in a range of 9% to 11%. The company indicated that foreign exchange is expected to be a headwind on a sequential basis, with a cited impact of roughly 2.5 percentage points from the June to the September quarter. Gross-margin guidance for the period was in the high-40s, with a range around 47% to 48%.

Executives highlighted “very significant” supply constraints, primarily tied to the availability of advanced semiconductor production nodes used in the company’s system-on-chip designs. They said the impact from these constraints is expected to increase significantly sequentially and to affect iPhone, Mac and iPad. After the guidance and comments on supply and cost pressures, Apple’s (AAPL) shares fell in after-hours trading, with coverage pointing to a decline of about 6% as investors weighed the strong quarter against a more cautious near-term outlook.