EL7 Research · Equities
3 November 2026 · Fiscal 2026 fourth-quarter results
Results for the September quarter, the first presented by John Ternus as Apple CEO, beat revenue, EPS and margin estimates, and the company promised its strongest revenue quarter ever. But December-quarter margin guidance of 45% to 46% fell short of analyst estimates because of memory costs, driving the share-price move after hours.
Apple reported September-quarter results on Monday evening, 2 November, covering the fourth quarter of its fiscal year 2026, the annual period used to prepare its accounts. It was the first quarter presented by John Ternus as CEO after succeeding Tim Cook on 1 September. Revenue reached 114.48 billion dollars, exceeding the upper end of the range the company had promised in July and LSEG estimates of 113.39 billion dollars. Diluted earnings per share (Diluted EPS), the profit per share after accounting for potential additional shares, were 2.10 dollars against an estimate of 1.99 dollars, and remained above estimates even excluding 5 cents from tariff refunds.
The completed quarter’s results did not drive the share-price move; company guidance for the December quarter, its expectations for performance in that period, did. Apple forecast revenue growth of 7% to 10%, a range entirely above the 6.1% growth analysts expected in the LSEG survey, and said it would be its strongest revenue quarter ever. However, it forecast a gross margin of 45% to 46%, the share of revenue remaining after deducting the cost of products and services sold. The range midpoint is 45.5%, below LSEG’s estimate of 46.3%. According to CFO Kevan Parekh, the expected margin decline primarily reflects higher memory costs, alongside some costs associated with the launch of Siri AI.
By our calculations at the midpoints of the company’s guidance ranges, revenue rises 8.5%, while gross profit, revenue less the cost of products and services sold, rises only about 2.5%. Operating expenses, the costs of running the business, such as research and development and marketing, grow between 11% and 13%. As a result, operating profit, gross profit less operating expenses, could be slightly below its year-earlier level in the “strongest revenue quarter ever”. Our preview on 1 November had identified margin guidance as more important than the reported margin, and the market’s reaction centred on that guidance.
In after-hours trading, trading after the regular session ends, the shares initially rose on the results, then fell within minutes of the guidance being read. They touched a low of 323.01 dollars, about 9 cents from the lower end of the trading range priced into options before the announcement. These contracts give holders the right to buy or sell an asset at a specified price within a set period. These are after-hours prices; the actual verdict will come at the close of trading on Tuesday, 3 November.
Revenue
114.48 billion dollars
113.39 in LSEG estimates
Above estimates
Growth of 7% to 10%
Growth of 6.1% in LSEG estimates
Above estimates
Gross margin
47.9%
47.5% in LSEG estimates
Above estimates
45% to 46%
46.3% in LSEG estimates
Below estimates
Services revenue
31.57 billion dollars
31.58 in LSEG estimates
In line
Growth of 8% to 9%
After 9.8% growth in September
Slower
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