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Apple's John Ternus confronts early test as global memory crisis hurts profits
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John Ternus' first earnings report as Apple CEO was going fine until it was time to issue a forecast for the company's gross margin, one of the key metrics followed by investors.
Key facts
- Parekh said that for the December quarter, which goes through the holiday season, Apple's gross margin will be between 45% and 46%, trailing the 46.3% average analyst estimate, according to LSEG
- In September, Apple increased the prices of its iPhones by $100, which Ternus said the company did "reluctantly
- Apple shares slid about 3% in extended trading, following a drop of almost 2% during regular market hours on Monday
- Ternus, who took the reins from Tim Cook on Sept. 1, is grappling with a problem that his predecessor spent his final months addressing
Summary
Apple reported better-than-expected earnings and revenue on Monday, including in the company's core iPhone unit, and even projected sales in the current period that topped estimates. Parekh said that for the December quarter, which goes through the holiday season, Apple's gross margin will be between 45% and 46%, trailing the 46.3% average analyst estimate, according to LSEG. "This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI," Parekh said. Apple shares slid about 3% in extended trading, following a drop of almost 2% during regular market hours on Monday.