Apple's John Ternus Runs His First Earnings Call, and Wall Street Grades on a Curve

Apple's new CEO just ran his first earnings call, and investors responded by knocking nearly 3% off the stock. John Ternus, who succeeded Tim Cook on September 1, delivered a fiscal fourth-quarter report that beat Wall Street on both revenue and earnings per share, with adjusted EPS of $2.10 against a $1.99 target and revenue of $114.48 billion, up 12 percent year over year. The trouble was the forward-looking stuff: guidance of 7 percent to 10 percent revenue growth for the holiday quarter landed well below the 11.4 percent analysts wanted, and that's the number that moved the stock, not the one in the rearview mirror.

The quarter itself had real bright spots. iPhone revenue hit $57.58 billion, up 17 percent, even though the period captured only eight days of iPhone 18 Pro sales and none of the new foldable model. Mac revenue jumped almost 24 percent on new Mac Studio and Mac mini launches. Services growth, meanwhile, slowed to under 10 percent, the weakest pace since September 2022, even as Ternus touted "all-time records in video, cloud services, payment services, and advertising."

On the call, Ternus leaned into the line Apple has been selling for years: hardware "offers a compelling reason for upgrading or switching." He declined to get specific about AI subscription plans, which matters because the brand's AI effort, and Siri in particular, is widely seen as trailing the autonomous agents competitors are shipping. Ternus inherited a company that is spending far less on AI data centers than its rivals and returning more cash to shareholders instead. That's a defensible strategy right up until it isn't, and the first quarter of his tenure made clear that Wall Street is going to judge every one of his choices against Cook's playbook for a while yet.

Source: SiliconANGLE

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →