Apple Inc. (NASDAQ: AAPL) experienced a 1.51% decline in its stock price on Monday, November 2, 2026, as investors awaited the company's quarterly earnings report scheduled for release after the market close. The stock traded at $339.41 by 11:46:49 a.m. EST, down $5.22 from the previous close of $344.63, according to Google Finance.
The market's attention is focused not only on the upcoming results but also on a notable financial detail from the June quarter: tariff refunds accounted for 24.4% of the annual diluted earnings per share (EPS) increase. This figure, derived from Apple's disclosures, provides a crucial benchmark for investors to evaluate the quality of the company's earnings growth.
Tariff Refund Impact on EPS
In the June quarter, Apple reported diluted EPS of $2.02, up from $1.57 in the same period a year earlier, representing a $0.45 annual increase. The company's July 30 earnings announcement disclosed a favorable $0.11 per share contribution from tariff refunds. This refund benefit alone accounts for 24.4% of the EPS growth, meaning that excluding this one-time benefit, EPS would have been $1.91, translating to a 21.7% growth rate compared to the reported 28.7%.
This calculation, based on Apple's financial statements and disclosures, is an editorial estimate and not an adjusted-earnings measure provided by the company. It helps investors understand the underlying business performance separate from the tariff refund windfall.
New CEO and Market Concerns
Monday's earnings report marks John Ternus's first earnings call as chief executive officer, succeeding Tim Cook in September. Reuters reported that investors are closely watching the holiday-quarter outlook and rising memory-chip costs, which could pressure margins. The tariff refund comparison becomes particularly relevant as the new management navigates these cost pressures.
Margins and iPhone Sales
Another way to separate the refund's impact is through gross margin. Apple's June gross margin was 50.1%, including approximately two percentage points from tariff refunds. Excluding that contribution, the adjusted gross margin would be around 48.1%. This subtraction does not account for changes in component costs or product mix.
In the June quarter, iPhone generated $54.252 billion of Apple's $109.417 billion in total revenue, representing 49.6% of sales. This figure measures revenue, not unit shipments. The iPhone 18 Pro's availability was scheduled for September 18, outside the June reporting period, so its impact will be reflected in the September quarter results.
Inventory Build-Up Signals Component Purchases
Apple's June Form 10-Q reveals a significant increase in inventory, rising to $11.092 billion from $5.718 billion at the September 2025 year-end, a 94.0% increase over nine months. This increase was driven by components, which rose by $5.521 billion to $7.645 billion, while finished goods actually fell by $147 million to $3.447 billion. The concentration in components suggests Apple was stocking up on parts, possibly ahead of the new iPhone launch or due to rising memory costs.
The same filing indicates that tariff refunds were recorded as reductions in product cost of sales, explaining their positive impact on gross margin. Apple also cited higher memory costs as an offset to product-margin improvements during the June quarter.
Looking Ahead
The upcoming earnings release will provide the next set of reported figures, allowing investors to assess whether the component build-up continued and how the company is managing cost pressures. The key questions are how much of the profit growth remains after excluding tariff refunds and whether the inventory balance has risen further or begun to unwind.
Risks include component cost increases, execution of the new iPhone rollout, and potential changes in tariff treatment. The size and timing of any further refund benefits remain uncertain. Monday's report will be a critical test for the new CEO and a clearer picture of Apple's underlying business momentum.
