SAN FRANCISCO, California: Apple projected stronger-than-expected revenue for the current quarter ending in September, helping lift its shares in after-hours trading even as Chief Executive Tim Cook cautioned that U.S. tariffs could add US$1.1 billion in costs during the period.

The tariffs, a key element of U.S. President Donald Trump's trade policy, had already cost Apple $800 million in the June quarter. Cook acknowledged that the uncertainty around tariffs led some customers to purchase iPhones earlier than usual this year, a factor that contributed to Apple's fiscal third-quarter results beating analyst estimates by the widest margin in at least four years, according to LSEG.

For the quarter ended June 28, Apple reported revenue of $94.04 billion, up nearly 10 percent from a year earlier and above the $89.54 billion analysts had forecast. Earnings per share were $1.57, compared with expectations of $1.43. Looking ahead, Chief Financial Officer Kevan Parekh said Apple anticipates "mid to high single digit" revenue growth in the September quarter, stronger than analysts' projection of 3.27 percent growth to $98.04 billion.

Shares of the Cupertino, California-based company rose three percent in after-hours trading after the forecast.

iPhone sales, Apple's most important business line, rose 13.5 percent to $44.58 billion, surpassing estimates of $40.22 billion. The company has been diversifying its supply chain, sourcing iPhones from India and manufacturing other products such as Macs and Apple Watches in Vietnam, to reduce exposure to tariffs. Sales in the Americas, Apple's largest market, grew 9.3 percent to $41.2 billion, while Greater China sales reached $15.37 billion, up from a year earlier and above Visible Alpha's consensus estimate of $15.12 billion. That performance reversed a decline in the previous quarter, supported in part by Chinese government subsidy programs that boosted smartphone sales.

Cook told analysts that Apple saw seasonal records for upgrades of iPhones, Macs, and Apple Watches during the quarter. He estimated that about one percentage point of the company's 9.6 percent revenue growth came from customers accelerating purchases ahead of potential tariff hikes.

The tariff outlook remains unsettled. While many Apple products are currently exempt, Washington is still negotiating with both China and India, and Trump has warned India could face tariffs of up to 25 percent. Analysts said that even if such duties are imposed, Apple's long-term production shift to India could help mitigate cost pressures.

Despite the strong quarter, Apple faces several challenges. Its stock is down 17 percent in 2025, underperforming technology peers such as Microsoft and Nvidia, whose valuations have surged on enthusiasm for artificial intelligence. Investors have expressed concern over Apple's slower integration of AI features compared with rivals. Cook confirmed that the company has delayed the launch of an AI-enhanced version of Siri but said Apple is "making good progress on a personalized Siri" and is expanding investments in artificial intelligence.

Apple's services business, which includes the App Store, music, and cloud storage, reported $27.42 billion in sales, ahead of expectations of $26.8 billion. Wearables revenue was $7.4 billion, short of the $7.82 billion forecast, while Mac sales reached $8.05 billion, above the $7.26 billion estimate. iPad sales totaled $6.58 billion, below the $7.24 billion analysts expected.

Gross margins in the June quarter were 46.5 percent, exceeding expectations of 45.9 percent. For the September quarter, Apple forecast margins between 46 percent and 47 percent, which was also above consensus.

Cook summarized the company's strategy by saying that Apple's approach to AI and other technologies remains focused on accessibility and ease of use, emphasizing that this philosophy "is at the heart of our AI strategy."