Apple earnings beat estimates, boosted by tariff refunds
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Incoming Apple CEO John Ternus (left) and CEO Tim Cook, at this week's premiere for Season 4 of "Ted Lasso." Photo: Kevin Winter/Getty Images
Apple on Thursday reported earnings and revenue that topped Wall Street expectations, though tariff refunds added 11 cents per share to earnings.
Why it matters: The report is the last of Tim Cook's tenure, with John Ternus set to take over as CEO on Sept. 1.
Driving the news: Apple reported per-share earnings of $2.02 on revenue of $109.4 billion, up 16 percent year over year.
- Analysts had been expecting per-share earnings of $1.89 on revenue just short of $109 billion, per Yahoo Finance.
Between the lines: Apple has recently raised prices on several products as it navigates tariffs and higher component costs, while competing in an increasingly expensive AI race.
By the numbers: Sales rose across every product line except the iPad, with June quarter records set for iPhone, Mac and Services.
- iPhone: $54.25 billion
- iPad: $6.19 billion
- Mac: $10.35 billion
- Services: $30.74 billion
- Wearables and accessories: $7.88 billion
Revenue rose in every geographic segment, setting June quarter records across all regions.
- Americas: $45.78 billion
- Europe: $29.39 billion
- Japan: $6.55 billion
- Asia Pacific: $8.87 billion
- Greater China: $18.8 billion
What they're saying: Cook said Apple posted its strongest June quarter ever.
- "We were able to achieve this despite supply constraints and sequential foreign exchange headwinds," Cook said on a conference call with analysts.
- Cook said the positive early reviews of the new Siri "underscore our philosophy that building AI that is private and based on personal context can change how users find information and get things done with our products in a way that truly enriches their lives."
Looking forward, Apple said to expect revenue for the current quarter to rise 9% to 11% from the prior year despite a challenging foreign exchange headwind and supply constraints for the iPhone, Mac and iPad that are up significantly from the March-to-June quarter.
- "We continue to expect high levels of demand. However, with less flexibility in supply chain, we expect the impact from the supply constraints to increase significantly sequentially," Cook said.
- Cook said Memory prices continue to rise.
- "We expected to pay significantly more in the June quarter than the March quarter, and that is what happened," Cook said. "For September, we expect to pay even higher memory costs."
Context: Apple shares fell about 4 percent in after-hours trading following the earnings release.
The bottom line: Apple's quarter gives Ternus a strong financial handoff as he prepares to take over next month.
This story is developing.
