Apple Shares Fall as Memory Costs Weigh on Margin Outlook

Apple shares fell about 4% in premarket trading Tuesday after the company forecast lower gross margins for the December quarter, citing rising memory costs and expenses tied to expanding its Siri artificial-intelligence capabilities. The decline followed Apple’s September-quarter results, which exceeded analyst estimates for revenue. Apple projected a gross margin of 45% to 46% for the December quarter, compared with 47.9% in the September quarter. Chief Financial Officer Kevan Parekh said higher memory prices were the main reason for the expected reduction, with some impact from costs associated with ramping up Siri. Chief Executive John Ternus described the memory market as unprecedented and said prices were expected to rise beyond December. The company’s September-quarter revenue reached $114.5 billion, up 12% from a year earlier and above the $113.4 billion analyst estimate cited in reports. Apple also reported record iPhone revenue for the quarter. Despite those results, investors focused on the outlook for the cost of making its products. Apple’s annual filing listed $89.7 billion in manufacturing purchase obligations as of September, up from $57 billion in June. Of the...