Apple posts its strongest June quarter ever and gets sold anyway

@Apple delivered what @tim_cook called the company's strongest June quarter on record, but the market's response told a different story. $AAPL fell nearly 7% in after-hours trading to around $309, unwinding part of a 24% year-to-date run to all-time highs.

A Record Quarter Across the Board

Apple's fiscal third quarter of 2026 produced revenue of $109.4 billion, up 16% from $94 billion in the same period a year earlier, beating Wall Street's consensus expectations. Diluted earnings per share came in at $2.02, up 29% year over year, while net income climbed to $29.8 billion.

Growth was broad-based. iPhone revenue reached $54.3 billion, up 21.7%, while Services brought in $30.7 billion, up 12.1%. Apple set new June quarter records for total revenue and earnings per share, as well as for iPhone, Mac, and Services revenue.

However, one detail tempered the headline numbers. Apple's gross margin reached 50.1%, but this included a favorable impact of around two percentage points from tariff refunds, which also added approximately $0.11 to diluted earnings per share. The refunds followed the U.S. Supreme Court's decision to strike down President Donald Trump's previously implemented global tariffs policy in February 2026. Strip out that one-time benefit and the underlying margin picture is less striking.

The End of an Era on the Earnings Call

The results landed on a symbolically charged occasion. The quarter marks the last earnings period for outgoing CEO Tim Cook. Apple announced in April that John Ternus is succeeding Cook as CEO, with Cook assuming the role of executive chairman on September 1. Ternus, a senior vice president of hardware engineering, will join Apple's board of directors when he becomes chief.

Cook has held the CEO role since 2011, when he succeeded the late Steve Jobs. Apple's market cap increased by more than 20-fold on Cook's watch. The transition hands Ternus a company firing on most cylinders, but also one where investors will now scrutinize every data point without the tariff tailwind that flattered this quarter's numbers.

Apple raised the prices of its Macs and iPads last month, citing a memory-chip shortage brought on by the artificial intelligence boom, calling the demand spike an "unprecedented challenge" for the consumer electronics industry. Analysts and consumers expect iPhone prices to rise later this year as well.

Sources:
Apple Q3 2026 earnings results: $109.4 billion in revenue, up 16% (9to5Mac)
Apple names John Ternus CEO, Tim Cook to become executive chairman (CNBC)
Apple Reports 3Q 2026 Results: $29.8B Profit on $109.4B Revenue (MacRumors)