Apple's growth cools under new CEO, but iPhone still carries the quarter

The headline numbers

Apple reported $114.5 billion in sales for its fiscal fourth quarter, which wrapped up on Sept. 26, a hair above consensus forecasts of $113.5 billion. Earnings landed at $2.10 per share versus a $2 estimate.

Growth decelerated versus the June period's 16% pace, and the stock ticked up less than 1% in after-hours trading following the release. Shares were up 24% for the year through the close. Apple had guided investors to expect revenue growth of 9% to 11%.

China, devices and the holiday setup

Greater China revenue rose 21% to $17.5 billion, but that tally missed expectations by more than $1 billion, underscoring a tougher backdrop even as the region grew.

The iPhone did the heavy lifting. Sales from the category climbed 17% to $57.6 billion, topping the $56.5 billion average estimate. Although Apple typically unveils multiple iPhone models in September, this year it introduced just the iPhone 18 Pro lineup.

A standard iPhone 18 and a new iPhone Air are slated for the first half of 2027, and the foldable iPhone Duo did not arrive until Oct. 23 - part of the following quarter. Results from iPad and wearables were particularly weak in contrast.

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Services steady, guidance on deck

Services - which spans streaming music, the App Store, iCloud plans, Apple TV and other digital offerings - increased 9.8% to $31.6 billion, matching projections. Apple typically offers an outlook for the current quarter on its earnings call. This time, attention will be on how much the foldable iPhone can add to holiday sales and when supply is expected to match demand.

Bloomberg's Ed Ludlow and Mark Gurman covered the results in a 1:58 video segment.

New boss, new hardware, same cash machine

This was the first earnings report under CEO John Ternus, who took the helm on Sept. 1 and was steering the company for the last month of the quarter. Since then he has introduced a foldable iPhone Duo, a MacBook Pro with a touch screen, and the HomeView hub - products that did not ship until the quarter now underway, which runs through December.

The bottom line: iPhone strength offset softer categories and a China miss, while major launches are loaded into the holiday stretch. For your portfolio, that sets up a classic Apple trade - near term dictated by supply and guidance, longer term by how the new devices expand the company's ecosystem and keep Services compounding.

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