Schwab Network on $AAPL (Nov 2, 2026)

We have Apple's earnings results, so let's analyze them. Earnings per share for the fourth quarter were $2.10. This exceeds the estimates by ten cents. Revenues reached $114.48 billion .

With an increase of approximately 12% year-on-year, it is also slightly better than expected . iPhone revenues reached $57.58 billion . This represents a 17% year-on-year increase, exceeding estimates by about $1 billion .

Mac revenues reached $10.79 billion , a 24% year-over-year increase, easily exceeding estimates of $9.7 billion by about $1 billion as well. But iPad revenues were disappointing.

$6.23 billion, a 10% decrease year-on-year. It also fell short of the estimated $6.89 billion. Revenue from wearables, home appliances and accessories reached $8.3 billion. This is a decrease of approximately 8% year-on-year, and it did not reach the estimated $9 billion.

Service revenues, a crucial metric, reached a new record high of $31.57 billion. These results were exactly in line with the estimates. The revenue of the Greater China region amounted to $17.54 billion .

But it fell short of estimates by more than a billion dollars. Analysts had expected $18.75 billion. Revenues from the Americas amounted to $48.68 billion. That was better than expected.

The company’s gross profit margins of 47.9% included a positive impact of approximately one percentage point from the tariffs. The quarter set record highs in total revenue, iPhone revenue, and earnings per share.

I mean, we're not seeing much movement in Apple's stock yet, George. We are only falling back by about a third of a percent as we begin to absorb these numbers.

Well, I think the obvious positive aspect is the mobile phone markets, which have exceeded expectations. The number of services as well, I think it will be very important once all this information is absorbed, considering the estimated figure, it was less than 10%.

If you go back and look at the last quarter, at least for June, it was around 12%. Therefore, a slowdown in the services sector, which now accounts for about 28% of total sales, was indeed expected.

I have not yet compared the gross profit margin figures. But I think some guidance regarding China going forward will be important, especially as they seem to have missed a bit in their China estimates, which were actually expected to be 28% higher year-on-year compared to the last quarter when it was 22.4% higher.

China's revenues amounted to approximately 16.5 billion. Market expectations were for 18.75 billion. So, there is a major failure here, along with some other metrics that have set records.

But we are not seeing much movement in the market. We are down approximately 1% now. So, what is everyone waiting for? Is everyone waiting to hear from John Ternos in his first earnings call?

Yes , that might be part of it. It may be more about guidance, because as we were talking with Dave, the fact that there is strong demand for the iPhone is not a huge surprise.

I mean, don't forget that this only includes eight days of sales of the newer, somewhat newer products. Growth in services was also expected to be a bright spot. The recovery in China is interesting because when I asked Dave about it, there were some indications or expectations that China's numbers would look a little better.

We saw that minor failure there. So, I think, as George pointed out, this will be important going forward, but the biggest focus for analysts has been on the December quarter guidance and also how the CEO, John Ternos, will outline the future growth strategy, as you mentioned, Molly.

People want knowledge, and I was reading Jane Munster's assessment of potential topics tonight. The future of these new products. Remember, he's a product man, and he even wonders if robots will be covered , if we'll get any additional details on the growth of services, the impact of the price increase in June, especially in relation to what we saw with Intel and that incident, and how Duo is performing , because Dave discussed that and made a sarcastic comment about the complaints and some of the criticism.

I mean, if you read some people's opinions on this topic over the weekend, you'll find that they weren't entirely positive. I mean, who would have thought that people would miss the facial recognition feature?

But that seems to be the case here, in addition to a lot about screen cracks and the like. I don't think the product has really lived up to the high expectations that preceded its launch.

So I think getting more information and details on some of these topics will be really important tonight.

Apple is proud to announce record revenues of $114.5 billion for the September quarter , a 12% increase over last year, with the iPhone setting a record in the September quarter and services reaching an all-time high, capping off our best financial year ever .

We end the year with our most ambitious lineup yet, which includes the most transformative iPhone duo since the original release , alongside the iPhone 18 Pro and iPhone 18 Pro Max, our most powerful iPhones to date.

We also introduced an entirely new generation of home appliances, and added touch functionality to Macs for the first time, along with the all-new Siri AI technology. It's an amazing collection that will accompany us throughout the holiday season.

Because we know that Apple only makes predictions during the call, does this pave the way for what they will say about a great holiday season? Because it seems like a prelude to that.

Yes, well, that might be so. I mean, the estimates point, I think, to around 153 billion for the first quarter of next year. This of course includes holiday sales, which will also include, incidentally, the deal which, um, is not currently listed in this particular quarter in terms of sales of that product .

I really think at the moment, um, from my assessment of the company, that their capital spending capacity has actually kept them on the right track compared to other major companies right now.

As long as they focus on what they do best , which is basic consumer products and services, they have once again set record revenue figures for this quarter. As long as they continue to meet their customers' needs and requirements, in general, I believe their capital expenditure figures have actually decreased.

For this reason, I believe this is one of the reasons for the improved performance over the past nine months or so, and the real rise compared to other large companies. But Apple's free cash flow metrics have always been positive, but given their continued capital spending policy, we should consider how they gained direct control over their AI infrastructure?

Because if they give up too much control, perhaps to another AI company, you know , to add to their existing ecosystem, that could be a concern in the future. So, we have to balance the idea that they haven't spent much recently, or at least not during the past year.

In fact, spending has decreased compared to 2025, based on the first three quarters of the year. But how long can they stop spending and risking, of course, the advanced AI models they actually need to rely on later?

Sam, we spoke with Jed earlier today , who said that one way to assess a healthy company is to look at its cash flows, which is what George was just talking about, and also whether they are returning a portion of that to shareholders.

And now I see a note from the CFO here stating that they generated about $28 billion in operating cash flow during the quarter, and returned about $28 billion to shareholders in the same period. So, I mean, this matches exactly what Jed said.

To what extent do we believe that the decline in sales in China is the reason for this reaction, let's say lukewarm, but bearish? We are only down by a tenth of a percent at the moment.

Yes, I mean I don't know to what extent we can attribute that to the move towards a decline, but it will certainly be a challenge going forward. I know that this is something that many analysts are watching very closely.

So, I think we'll need to understand more details about this because sales of the iPhone 18 Pro models have been performing extremely well in China. I was just looking at a Counterpoint Research report on this .

Sales were 29% higher in China during the first three weeks of the device's availability. Therefore, this was seen as largely offsetting some of the weaker demand we've already seen here in the United States and also in other key markets for this company such as Japan.

As I explained in my conversation with Dave , we have seen some Android device manufacturers already forced to raise retail prices in China, narrowing the price gap with some of the more premium iPhones, which has also shifted consumer preferences toward Apple.

Therefore, I believe this is why expectations before entering this particular Chinese market are extremely high.

But Marley, you mentioned John Ternos's statement that you just read. I mean, it's not surprising that he would make such statements. I mean, he's primarily a product man. He has been very busy since taking office in September, as we know , with the launch of "Deo" and the launch of household products .

But I know that many analysts, before getting into this—and perhaps this is the aspect where more details need to be clarified —see the real test still as being with Siri, given that Siri is now integrated into homes.

Another viewpoint I heard today from another analyst is that one of the biggest risks facing Apple right now is the future of AI agents, how people are currently using them, and what that means for the future AI strategy of a company that didn't have a strong story to tell in this area compared to some other companies.