Apple Sales Rise 12%; Tariff Refunds Pad EPS: Rapid Earnings Reaction
We look at how much of Apple's earnings growth came from the business itself, and what its ambitious holiday lineup has to prove.
Apple reported record September-quarter revenue of $114.5 billion for its fiscal 2026 fourth quarter, marking a 12% increase from the previous year. However, not all the profit growth is due to sales alone. The gains can be attributed to tariff refunds which added approximately a point of gross margin and $0.05 to earnings per share (EPS). Without considering these one-time refunds, Apple's EPS growth slowed to about 11%, slightly below the sales growth.
Apple's consistent stock buybacks typically result in per-share earnings surpassing sales. Comparing trailing sales with the current figures suggests that underlying costs have kept pace with revenue. The real test lies in the upcoming holiday quarter, as Apple prepares to launch the iPhone Duo, new home hardware, and updates to the Mac and Siri.
This broad launch could drive upgrades, but new designs often have higher initial production costs, which could squeeze margins during the period when the refund benefits diminish.
Investors should closely monitor gross margin in the next quarter without including the refunds. If gross margins hold near the current level of about 47%, it would indicate that the new lineup isn't eroding profits. Furthermore, it is crucial to pay attention to the guidance for the December quarter, as the company has not provided any guidance yet.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
