UNITED STATES — Apple is approaching a significant earnings milestone as newly appointed CEO John Ternus prepares to oversee his first earnings call since succeeding Tim Cook in September.
Investors will be closely watching whether the company’s latest product releases can maintain sales momentum while counteracting higher memory-chip expenses that threaten profit margins.
Under Ternus’ leadership, Apple has introduced several major products, including its first foldable smartphone, a smart-home hub and its first touchscreen laptops. The devices began shipping during the current fiscal first quarter.
However, escalating memory prices are adding financial pressure to the company. The latest cost increases follow what former CEO Tim Cook previously characterized as a “100-year flood” of rising memory expenses.
Analysts anticipate that Apple’s quarterly profit growth will fall to its slowest rate in six quarters as higher component costs weigh on profitability.
LSEG data shows that analysts are forecasting revenue of $113.39 billion for the July-September period, an increase of nearly 11%.
Net income is expected to total $29.04 billion, representing growth of approximately 6% compared with the same period last year.
Apple’s services business is also expected to draw investor attention. Analysts project that services revenue will climb almost 10% to $31.56 billion. Despite continued expansion, that would mark the division’s slowest growth in more than three years.
IPhone revenue is forecast to increase approximately 15% to $56.54 billion. This would be a notable deceleration from the approximately 22% growth reported during the preceding three months.
The upcoming financial results will capture just nine days of sales for the new iPhone 18 Pro models. Apple’s first foldable handset, the iPhone Duo, arrived on October 23 and is expected to have a greater impact on results during the holiday quarter.
Priced at $1,999, the device has generated substantial interest, with online orders becoming unavailable within minutes of going on sale. However, reports that some displays have developed cracks and lines along the central fold have introduced a new challenge.
Apple has offered replacement devices to customers experiencing the reported problems.
IDC analyst Nabila Popal expects demand for the iPhone Duo to remain stronger than available supplies, even with the screen-related concerns. Apple’s ability to replace defective devices while keeping enough products in stock will be an important factor.
Bank of America estimates that buyers are currently facing average delivery delays of 79 days, with some shipments scheduled to arrive in January.
Artificial intelligence is also expected to feature prominently in Ternus’ first earnings discussion.
Unlike technology companies committing substantial resources to AI infrastructure, Apple has followed a different strategy, placing greater emphasis on consumer privacy and trust rather than competing solely through the size and capabilities of its AI systems.
Investors are expected to seek further details about the company’s redesigned Siri and its plans for integrating third-party artificial intelligence services.
Dan Morgan, portfolio manager at Synovus Trust, which holds Apple shares, said investors want greater clarity about how the company plans to compete with rapidly developing AI products.
Morgan also pointed to the possibility of Apple generating additional revenue by making third-party AI agents available through its App Store.
Apple’s stock has risen approximately 27% this year, outperforming major technology companies such as Microsoft, Alphabet, Meta and Amazon.
The company’s relatively restrained spending on AI infrastructure has also appealed to investors concerned about the substantial expenses involved in developing and operating advanced artificial intelligence systems.
The upcoming earnings announcement will give investors an opportunity to assess whether Apple’s new product lineup, expanding services business and artificial intelligence strategy can maintain growth while limiting the impact of rising costs on profitability.
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