[Earnings Recap] iPhone Sales Surge, but Apple Falls. Why?

Monday’s earnings exposed two different kinds of forward risk. Apple beat quarterly estimates but warned that memory costs would squeeze holiday margins. Palantir nearly doubled revenue and issued a strong forecast, yet slowing commercial contract growth gave investors a reason to question the stock’s valuation.

Marriott was the clear winner, rallying 4.3% as travel demand and guidance exceeded expectations. Estée Lauder delivered a clean beat and raised its outlook, but an early gain reversed into a 4.1% closing loss.

$Palantir(PLTR)$ down nearly 3% in late after-hours trading.

Palantir sells data-management and artificial-intelligence software to businesses and government agencies.

Third-quarter revenue jumped 96% to $2.31 billion, beating the roughly $2.18 billion consensus. Both GAAP and adjusted EPS were 44 cents, compared with an adjusted estimate of 41 cents.

U.S. commercial revenue surged 148% to $984 million, overtaking U.S. government revenue for the first time. Palantir forecast fourth-quarter revenue of $2.649 billion to $2.653 billion, well above Wall Street’s $2.46 billion estimate, and raised its full-year target to about $8.53 billion.

The shares turned lower after an initial gain and were down nearly 3% in late after-hours trading. Investors focused on U.S. commercial contract-value growth, which slowed to 11% from more than 153% in the prior quarter. At a valuation above 150 times trailing earnings, even 96% revenue growth left little room for weaker bookings.

$Apple(AAPL)$ dropped roughly 2.8% after hours.

Apple makes the iPhone, Mac and other consumer devices and operates a large digital-services business.

Fiscal fourth-quarter revenue rose 12% to $114.5 billion, beating the roughly $113.5 billion consensus. GAAP diluted EPS of $2.10 topped expectations near $2.00. iPhone revenue increased 17% to $57.58 billion, also ahead of forecasts.

The concern came from the holiday outlook. Apple expects gross margin of 45% to 46%, down from 47.9% in the reported quarter, as memory-chip prices increase. Services growth is projected at 8% to 9%, below Wall Street’s 10.7% estimate.

Apple fell about 1.6% during regular trading and dropped roughly 4% after hours. The selloff reflected worries that higher component costs and slower services growth could pressure profitability despite healthy device demand.

$Estee Lauder(EL)$ dropped roughly 4%

Estée Lauder owns prestige beauty brands including La Mer, MAC, Jo Malone and Tom Ford Beauty.

Fiscal first-quarter sales rose 7% to $3.72 billion, ahead of the approximately $3.65 billion estimate. GAAP EPS was 64 cents, while adjusted EPS of 72 cents easily beat the 51-cent consensus.

Management raised its fiscal 2027 organic-sales growth forecast to 4%–5.5% from 3%–5% and increased its adjusted EPS outlook to $3.20–$3.45. Organic sales in mainland China grew 9%.

The stock gained nearly 3% before the open but reversed to close 4.1% lower. Shares had already risen almost 28% over the previous three months, while part of the Americas sales improvement came from a one-time gift-card accounting benefit. Investors appeared to want more evidence that the recovery can carry through the holiday quarter.

$Marriott(MAR)$ gained nearly 4.3%

Marriott operates and franchises hotels under brands including Ritz-Carlton, Sheraton, Westin and its namesake chain.

Third-quarter revenue reached $7.01 billion, topping the $6.91 billion consensus. Adjusted EPS of $3.02 beat the $2.83 estimate; GAAP EPS was $3.04.

Worldwide revenue per available room rose 6.5%, with 7.4% growth in the U.S. and Canada. Marriott projected fourth-quarter adjusted EPS of $3.14 to $3.21, versus the $2.96 consensus, and raised its full-year range to $12.07–$12.14.

Shares finished Nov. 2 up 4.3% as investors rewarded stronger travel demand, higher guidance and $1.3 billion of third-quarter buybacks.

💬 Discussion

Which one is most likely to bounce first: Apple, Palantir or Estée Lauder?