Apple gross margin forecast misses estimates amid rising memory costs
New Apple CEO John Ternus faces immediate financial pressure as elevated memory costs weigh on the company's profitability projections for the holiday quarter.
In his debut earnings report as Apple CEO, John Ternus presented a gross margin forecast that fell below analyst estimates, triggering a decline in the company’s share price. While Apple exceeded expectations for revenue and iPhone sales for the latest quarter, the outlook for the December period remains pressured.
CFO Kevan Parekh attributed the projected 45% to 46% gross margin to rising memory prices and expenditures related to the rollout of Siri AI. This marks the third consecutive quarterly decline in gross margin, underscoring the impact of ongoing supply chain cost volatility on the hardware giant's bottom line.
Ternus described the current memory pricing environment as unprecedented, warning that costs are expected to climb further. To manage these pressures, Apple has previously implemented price increases across its Mac and iPad lineups, an effort initiated under former CEO Tim Cook to mitigate what he described as a severe industry-wide supply disruption.