Apple on Thursday posted strong results driven by robust demand for its flagship iPhone 17 and MacBook Neo helping lift its sales outlook and sending shares up nearly 4% in after-hours trading.
Despite the upbeat performance the company warned of ongoing semiconductor supply constraints which continue to pressure its supply chain alongside rising memory chip costs.
Nevertheless, Apple said strong demand for the Mac Neo, steady growth in services, and solid performance in China supported its positive outlook.
The company projected revenue growth of 14% to 17% for the current fiscal third quarter, exceeding Wall Street expectations of about 9.5% growth to $102.93 billion, according to LSEG data.
In the latest quarter iPhone revenue the company’s primary income source came in at $56.99 billion slightly below analyst estimates of $57.21 billion. CEO Tim Cook said shipments were constrained due to shortages of advanced processor chips used in the iPhone 17 lineup.
Cook emphasized that demand for the new devices remained exceptionally strong but supply chain limitations reduced production flexibility. He added that the chips powering the iPhone 17 are built using advanced manufacturing technology similar to those used in leading AI processors.
A major contributor to growth was the MacBook Neo, priced at around $500 for students which analysts believe could help Apple expand into the budget laptop segment currently dominated by Chromebooks. Mac revenue reached $8.4 billion, beating expectations of $8.02 billion.
For the fiscal second quarter ending March 28, Apple reported revenue of $111.18 billion and earnings of $2.01 per share, both above market forecasts.
Gross margins stood at 49.27%, also surpassing expectations. However, Apple warned that rising memory chip costs are expected to pressure margins in the upcoming quarter, with guidance set between 47.5% and 48.5%.
Cook also confirmed that Apple is seeking refunds for tariffs paid during the second administration of U.S. President Donald Trump with plans to reinvest the recovered funds into U.S. manufacturing.
The company’s services segment which includes the App Store and other digital businesses, generated $30.98 billion, exceeding estimates. Revenue from Greater China also rose to $20.5 billion, beating forecasts.
Additionally, Apple announced a $100 billion share buyback program, aiming to reassure investors amid leadership transition concerns and intensifying competition in the artificial intelligence sector.
