Apple falls 1.9% after guiding margin down to 45%-46%, the first miss of the Ternus era

Apple shares closed Tuesday at $331.90, down $6.42 or 1.90%, according to Nasdaq.com, the day after the company reported its first quarter under CEO John Ternus. Nothing in the results themselves was weak. The drop came from the forecast: Apple told investors its gross margin will fall to between 45% and 46% in the December quarter.

We covered the numbers in our earnings report story. This is what the guidance and the call changed.

The guidance, against the Street

According to CNBC's live coverage, CFO Kevan Parekh guided December-quarter revenue growth of 7% to 10%, against a 6.1% average estimate from LSEG. He guided gross margin to 45% to 46%, against a 46.3% average estimate. Services growth was guided to 8% to 9%, which CNBC describes as slowing growth. CNBC reported the stock slid about 3% in extended trading Monday night.

The New York Post reported the same margin range and the same reading from investors, and quoted Ben Barringer of Quilter Cheviot saying "where investors were left wanting was in the margin." The Post cited a slightly higher estimate range of 46.3% to 47%, so the size of the miss depends on whose consensus you use. It is a miss on any of them.

The number behind the number

Apple's press release put September-quarter gross margin at 47.9%, including about one percentage point from tariff refunds. Strip that out and the underlying figure was roughly 46.9%. Against that base, the new guide is a drop of about 0.9 to 1.9 points on an underlying basis, and 1.9 to 2.9 points against the reported figure.

The scale of that: on the $114.5 billion of revenue Apple reported for September, one point of gross margin is about $1.1 billion of gross profit. This is our arithmetic on last quarter's revenue, not a forecast of the December dollar amount, which will be larger because Apple guided revenue growth.

That is why revenue strength did not help. Apple said memory costs rose again from the June quarter and, per CNBC, Ternus said it raised prices "reluctantly" in June to offset component costs. The company is still raising revenue, and the guide says it is keeping less of each dollar.

A first call that did not land

The Post reported that investors were disappointed by Ternus's performance on the call, with critics saying he stuck to scripted comments, was vague on when Apple can make enough iPhone Duo units to meet demand, and sidestepped a question on AI competition. Those are the Post's characterizations and reactions from users on X, not Apple statements. The Post also noted that Ternus handed many questions to Parekh and Chief Operating Officer Sabih Khan, who it said will take part in future calls.

The Post's headline says revenue was $114.8 billion. Apple's own release and CNBC say $114.5 billion; we use Apple's figure.

Who feels it

For a retailer, repair shop or contractor buying iPads or Macs for point-of-sale and field work, the guidance suggests Apple is not about to cut hardware prices. A 45% to 46% margin target alongside rising memory costs points to prices holding where they are. If a device refresh is on the calendar, do not wait for a discount that the forecast gives no sign of. For investors, the stock now trades on whether the iPhone Duo, which was not in the September quarter, can lift volumes enough to offset the cost pressure.

Nasdaq showed Apple at $329.50 in after-hours trading at 7:45 PM ET. Its 52-week range is $243.42 to $351.73.

More background is in our Apple stock explainer and on our stocks page.

Sources: Apple fourth-quarter fiscal 2026 results, Nov. 2, 2026; CNBC live coverage of the earnings call (LSEG estimates); New York Post Business, Nov. 3, 2026; Nasdaq.com AAPL quote retrieved 7:45 PM ET Nov. 3. Margin and dollar comparisons are our calculations. This is market information, not investment advice.