Apple tops estimates in CEO Cook's final quarter, but shares fall

Apple beat market expectations in its latest results on Thursday, capping Tim Cook's final earnings report as CEO with a strong showing, although the outlook for the current quarter disappointed investors.

The Cupertino-based tech giant's results were powered by robust iPhone demand, a sharp rebound in China and double-digit growth in every region where it operates.

Sales rose 16 percent to $109.4 billion in the April-through-June period, while profit climbed 27 percent to $29.8 billion.

The company's performance was boosted by refunds of tariffs imposed last year by Donald Trump and overturned by the US Supreme Court in February.

Its iPhone sales jumped 22 percent to $54.3 billion as customers kept upgrading to the latest models, while Mac revenue climbed 29 percent, with higher prices doing little to dampen demand.

Apple's services business -- which spans the App Store, iCloud, Apple Music and advertising -- grew 12 percent to $30.7 billion, slightly below analyst expectations.

Souring the picture, Apple forecast revenue growth of between nine and 11 percent in the current quarter, below estimates, citing supply constraints.

Cook told analysts the constraints stemmed from unexpectedly strong demand for the iPhone and Mac.

The guidance sent Apple shares down by as much as eight percent in after-hours trading.

"Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment," Cook said in a statement.

The earnings announcement was expected to be the last for Cook as chief executive.

John Ternus, who attended the post earnings analysts call with Cook, will take over as Apple chief executive on September 1, with Cook becoming executive chairman of the iPhone maker's board.

Cook has led the company since 2011, taking over shortly before the death of co-founder Steve Jobs.

Long criticized for falling behind in the AI race, Apple is now being rewarded by Wall Street for resisting the vast investments its big tech rivals have poured into chips and data centers.

Apple touched a $5 trillion market value this week, while some rivals have seen their shares punished as investors question the profitability of their huge AI bets.

Meta's shares sank about nine percent Thursday after this week's results stoked alarm over its spending.

Microsoft, by contrast, rose sharply after signaling its AI bets were starting to pay off.

The major concern for Apple's business is rising prices for memory chips, a key component for electronics.

The iPhone maker in June raised prices for its Mac computers and iPad tablets, citing spiraling memory and storage costs sparked by the rise of artificial intelligence, though it spared the iPhone.

Cook told analysts it was too early to say how those price hikes would affect demand over time.

Attention is now turning to how Apple will price its next lineup of smartphones, expected in September and reportedly including a foldable model.

This week the company also launched Apple Upgrade, a leasing program that lets US customers pay for an iPhone or other devices in monthly installments.