Apple earnings takeaways: Weak forecast, supply concerns overshadow sales beat in Cook's last report as CEO

Apple's fiscal third quarter earnings exceeded expectations, buoyed by a 22% surge in iPhone sales. However, the tech giant delivered weak guidance for the coming period, citing supply constraints. The stock experienced a decline of over 6% in extended trading after the announcement.

For the quarter, Apple's net income soared to $29.79 billion, or $2.02 per share, compared to $23.43 billion, or $1.57 per share, a year ago. The earnings figure included 11 cents per share from tariff rebates. Apple is currently dealing with a global memory shortage, or a "hundred-year flood" as CEO Tim Cook recently described it, coupled with a surge in demand for chip manufacturing capacity that has already compelled the company to raise prices on Macs and iPads.

Although Apple has not yet announced price hikes for iPhones, many analysts anticipate such increases this year.

Apple's revenue growth for the quarter exceeded 15% for the third consecutive period. Current CEO Tim Cook, who delivered the earnings call, is stepping down to be replaced by John Ternus, a 25-year Apple veteran and current head of hardware. At the call, Cook did not address supply concerns directly, but hinted at the challenges Apple faces by stating, "We see the market pricing for memory continuing to increase."

Incoming CEO John Ternus did not speak during Cook's last earnings call, but expressed his excitement about Ternus' leadership on the call. Ternus said, "There is so much opportunity for us with everything that's happening in this space, and we're just really focused on our plans and very excited about it."

Apple expects its revenue growth for the current fiscal quarter to fall between 9% and 11%, falling short of analysts' 12% growth expectation. CFO Kevan Parekh said the company continues to see high demand for iPhones, with sales expected to increase in the mid-teens on an annual basis. However, the company anticipates iPhone revenue to be impacted by foreign exchange headwinds and supply constraints, which could reduce growth by 2.5 percentage points in the fiscal fourth quarter. Apple's gross margin for the quarter is forecasted to be between 47% and 48%.