Breaking Down Apple's Q3 Results and Outlook

We are getting these numbers crossing the wire right now. Start with the bottom line. EPS for the fiscal third quarter, $22 a share. A beat the street was looking for 189. Revenue uh for uh the quarter uh coming in at 109.42 uh billion. That's also a beat over 108.85 uh for the quarter. Services revenue uh looks like a little light at 30.7. iPhone revenue 54.25 slightly above what the street was looking for. relatively in line on wearables operating expenses slightly higher than what the street was looking for. And one number I'm also interested in here, uh, Emily, was actually the greater China revenue. It did come in a little bit light, $18.8 billion. Street was looking for, $19.5 billion. Uh, but obviously, uh, the big question going forward isn't so much uh, what these numbers look like in the third quarter, but how much they change over the next couple of quarters with the introduction of some of these new products. >> Yeah. I mean, and if this quarter really and the quarters going forward really is a product story here, then China is going to be important. There's a lot of competition in that market that I think sometimes American consumers forget about. Just going over some of those numbers again, Greater China revenue still, you know, a slight miss here. America's revenue though beating estimates, $45.78 billion. That's up 11% year-over-year and also beating estimates. The shares though remain down 2%. gross margin in the quarter up about 25% slightly above what the street was looking for both in terms of the growth rate as well as the actual number. Mark German of Bloomberg uh still with us here as we start to parse through these earnings and you know relatively hoham report when you look at these numbers and it seems a lot of people are looking forward but is there anything that jumped out and more importantly Mark when we get to that conference call at 5:00 pm and uh they're going to have to really start to articulate a forecast of some sort what do you expect to hear from them? Well, they essentially missed on everything except two segments. Uh the good news is that they beat on iPhone. Uh this is about a 11 billion year-over-year uh increase. They missed on services. Uh but the iPhone is everything is built around the iPhone, so it's pretty successful. >> But why services? I I mean that that kind of jumped out at me because I thought that was sort of the ballast for this company. Uh no matter what what was going on with hardware sales, the services was going to hold up. Well, I mean, the good news is that this Apple upgrade service, I mean, that's going to continue to make things a subscription, but I do need to point out the Mac absolutely destroyed estimates coming in, what is it, north of uh 10 billion. So estimates >> is that surprising cuz I felt like I don't know. I feel like a couple years ago, we were all saying, you know, oh, the Mac was being written off or was it just a refresh of these products? >> Honestly, to be honest with you, you man, when I saw these estimates the other day, I thought the 8.6 billion was a little light. The Mac has been having tremendous momentum because of their in-house silicon. And the good news is is the person driving this Mac renaissance. That is John Turnis. I mean, he made his name at Apple for reinventing the Mac around these chips. Uh the MacBook Neo is clearly a hot seller. The new MacBook Airs and Pros clearly hot seller. So, I think this is a good omen for Apple and his tenure to be honest with you. Plus, the iPhone being strong. The iPad, you know, it's been weak for years now because they haven't really done much with it. There'll be a new iPad mini uh in several weeks from now uh with a new display with the OLED. Uh wearables is light. Like we talked about service is light, but uh if I'm an Apple investor, I'm liking the Mac number, especially because that's now like the AI machine of choice. >> What do the investors want to hear on this earnings call coming up? >> Oh, they want to hear uh strong guidance particularly around gross margin. They want to know that these price increases are going to do the trick. I think the investment community is no longer of the opinion these price increases are going to hold back sales. I think they're of the opinion now that it's going to hold margin steady or back at the corporate average, something around there, but also increase sales because the new iPhone 18 Pro and Pro Max, the new foldable iPhone, the new Apple Watches launching this quarter are going to drive a lot of demand. So, we're going to get our first sneak peek of how meaningful Apple believes these new products launching in just probably 5 to 7 weeks from now uh are going to do because this quarter is going to include a couple weeks of sales of those products. So definitely looking forward to any color