Story
Nov 3, 2026
Apple’s Earnings Beat Cannot Hide Its Growing Supply Squeeze
Apple’s first quarter under John Ternus delivered the reassuring headline investors wanted, but Apple’s own executives and an outside analyst point to a more fragile picture: strong flagship demand is colliding with costly component shortages and softer performance beyond the iPhone.
John Ternus took over from Tim Cook on September 1, then faced investors for his first earnings report with Apple emerging as an outlier in a rough quarter for several large technology companies. The company reported stronger-than-expected fiscal fourth-quarter revenue, giving its new chief executive an early win.1
On Monday, Ternus framed the result as the payoff from an unusually busy product cycle. “This is an amazing time at Apple,” he told analysts, citing “one of the most prolific launch periods in our history.” Revenue reached $114.5 billion, above the $113.46 billion expected by Wall Street, while earnings per share of $2.10 also beat forecasts. iPhone revenue came in at $57.58 billion and Mac sales hit $10.79 billion, more than $1 billion above estimates.2
Yet the beat came with visible weak spots. Greater China revenue was $17.54 billion, missing the $18.75 billion forecast, while iPad sales also fell short. Jesse Cohen, a senior analyst at Investing.com, called the China miss “not a rounding error” and warned that Apple’s businesses beyond the iPhone were not carrying enough weight.2
Margins face a second test. CFO Kevan Parekh said that without tariff refunds, company and product gross margins would each have declined about one percentage point sequentially, “primarily driven by higher memory costs.” Ternus said memory pricing was “unprecedented,” even as hardware price rises helped cushion the impact.2
The pressure became more tangible after the October 16 iPhone Duo preorders and its October 23 release. Apple’s first foldable handset, starting at $1,999, quickly accumulated delivery waits stretching into late January 2027. Chief operating officer Sabih Khan said the company was “thrilled” by the response but conceded: “It’s really hard to predict when supply and demand will be in balance.” He said the December quarter would also face Mac and iPad constraints, primarily because memory demand had outrun Apple’s expectations.3
Apple has the sales momentum Ternus needed for his opening act. The harder question is whether it can secure enough chips and memory to turn that demand into a durable encore.