Apple Beats Fourth-Quarter Estimates on Strong iPhone 18 Pro Sales

Apple reported quarterly results that topped market estimates, helped by strong sales of its latest iPhones and higher product prices.

Reuters reported on November 2 that Apple posted fiscal fourth-quarter revenue of $114.48 billion, beating the $113.39 billion average estimate compiled by LSEG. Earnings per share came in at $2.10 even excluding the effect of tariff refunds, above expectations of $1.99. Apple shares fell about 1% in after-hours trading after the results were released.

The earnings beat was driven by strong early sales of the iPhone 18 Pro lineup. Fourth-quarter iPhone revenue was $57.58 billion, topping the market forecast of $56.54 billion. Apple also raised prices on some iPhone and MacBook models to offset higher costs after memory chip prices surged amid rising demand from the artificial intelligence industry.

Profitability was also better than expected. Apple's fourth-quarter gross margin was 47.9%, above the market estimate of 47.5%. John Ternus, who became chief executive officer in September, said memory costs rose from the previous quarter, but the impact was offset by the use of existing inventories, lower prices for some components and product price increases.

Apple is also changing its new-product release strategy. The company had typically unveiled its main iPhone lineup all at once each fall, but it has staggered launch timing starting this year. It plans to release the iPhone 18 Pro and the foldable iPhone Duo this year, with the rest of the lineup due next year. Apple is also expanding into new product categories including touchscreen laptops and smart-home hubs.

Still, the first foldable iPhone, the iPhone Duo, faces risks from supply shortages and screen defects. Some users have reported cracks in the display, and Apple is replacing affected devices. Ternus said the return rate remains very low, but current production is not keeping up with demand. He added that it is difficult to predict when supply will normalize.

By business segment, Mac revenue reached $10.79 billion, well above the $9.61 billion estimate. That appears to reflect rising demand from users looking to run AI agents on Macs. Services revenue was $31.57 billion, roughly in line with market expectations.

By contrast, iPad and wearables revenue missed forecasts, at $6.23 billion and $8.3 billion, respectively. Apple said daily request volume for Siri, its voice assistant upgraded with stronger AI features, has reached 2.5 billion, underscoring the company's push to expand AI services.