Apple blew previous Wall Road expectations in its first earnings report because it introduced CEO Tim Prepare dinner can be stepping down.
Prepare dinner shared his ideas concerning the management transition on Thursday, saying: “There’s nobody on this planet I belief extra to steer Apple into the longer term” than incoming CEO John Ternus. Requested by an investor what recommendation he’s given Ternus, Prepare dinner stated: “Always remember the north star for the corporate. You already know, we’re about making the very best merchandise on the planet that basically enrich different individuals’s lives.” Ternus spoke briefly, too, praising Prepare dinner’s thoughtfulness in monetary decision-making and saying: “That is probably the most thrilling time in my 25-year profession at Apple to be constructing services and products.”
Prepare dinner reported Apple’s “greatest March quarter ever” and “double-digit development throughout each geographic section”. He additionally famous “extraordinary demand for the iPhone17 lineup”.
Apple crushed Wall Road expectations of $110bn in income, racking up $111.2bn for the second quarter of 2026. That pattern held in larger China, the place income reached $20.4bn. Apple additionally beat Wall road expectations of $1.96 in its earnings per share, and reported $2.01.
Apple’s shares rose in after-hours buying and selling after the discharge.
Apple’s 20 April announcement that Ternus would take over as the corporate’s prime govt in September comes at a important juncture for the iPhone maker.
Apple has not invested as closely in AI as its largest opponents however it’s nonetheless bearing a few of the prices from the AI growth. OpenAI, Google and Microsoft shopping for up a lot of the world’s reminiscence chip provide has made them costlier, rising prices for Apple to construct its merchandise. Prepare dinner warned Thursday that there can be “considerably increased” reminiscence prices within the third quarter, however instructed buyers that the primary provide constraint for Apple have been the superior nodes that chips are produced on, not the reminiscence chips. Samsung reported its quarterly earnings the identical day, which confirmed a virtually 50-fold enhance in reminiscence chip revenue.
Ternus additionally inherits an advanced privateness legacy. Whereas Prepare dinner has fought exhausting for these protections within the US, he has made important concessions in China – Apple’s second-largest and fastest-growing market.
Prepare dinner stated he was thrilled Thursday by rising income in China – primarily pushed by iPhone gross sales – and that he sees a “big alternative” and is “over-the-moon excited” about India, too. India hosts the second-biggest cellphone market, and Apple at the moment has solely a “modest share” there, he stated.
Prepare dinner additionally spoke about how Apple is approaching AI: “not as a standalone function” however as an “important, intuitive a part of the expertise throughout our units”, citing AirPods’ reside translation function and a promise to launch a revamped Siri later this 12 months. Prepare dinner stated the corporate “under-called the extent of enthusiasm” shoppers would present for the newly launched, budget-focused MacBook Neo.
Ternus, at the moment senior vice-president of {hardware}, joined Apple’s product design crew in 2001. Apple has stated his contributions have been instrumental in introducing many new merchandise, together with the iPad and AirPods, in addition to many generations of iPhone, Mac and Apple Watch merchandise. Ternus is predicted to be in cost by the point Apple launches its first foldable iPhone later this 12 months.
