Apple’s incoming CEO introduced himself to Wall Street on Thursday, in a brief earnings-call debut in which John Ternus emphasized his commitment to continuity at the $4 trillion company.
Ternus, who will officially replace CEO Tim Cook in September, promised to continue the “deep thoughtfulness, deliberateness and discipline” in financial decision making that has marked Cook’s 15-year tenure leading Apple, calling his predecessor “one of the greatest business leaders of all time.”
He even showed off his proficiency with the Apple marketing playbook of secrecy-tinged hype, teasing that the iPhone maker is working on “an incredible roadmap” of products but that “you’re not going to get me to talk about the details of that roadmap.”
Investors seemed to shrug at their introduction to the new boss—which may have been exactly how Apple wanted it.
Shares of Apple, which had dipped less than one percent in after-hours trading following the release of the company’s fiscal second quarter earnings report, barely budged during Ternus’ comments or those of Cook, who called Ternus “the right leader to step into the role.”
When Apple CFO Kevan Parekh provided a much stronger-than-expected revenue forecast for the current quarter, however, Apple shares sprang to life and rose more than 4%. Sales of iPhones in fiscal Q3 should increase between 14% and 17% year-over-year, Parekh said, compared to the 9% increase that analysts were expecting.
The iPhone remains the critical pillar that supports Apple’s business, representing just over half of its $111 billion in revenue last quarter. Cook said demand for the smartphone was robust in virtually every geographic market in the first three months of the year despite challenges obtaining sufficient supply of the processors inside the devices.
The right time for a change
Cook, who cut his teeth as an operations executive fluent in the intricacies of electronics supply chains, said the moment was right for him to hand over the reins, noting that among other things “the business has been performing extremely well.”
While investors Thursday seemed more preoccupied with the business’ near term performance, particularly iPhone sales, than with the CEO transition, Ternus will likely face a more critical audience with broader questions as his tenure gets underway. Apple has fallen far behind on developing in-house AI models, to the point that it has had to partner with Google for its AI needs. And the successor to the iPhone, which is now nearly 20 years old, remains a mystery. Apple’s last attempt at a new device, the $3,500 Vision Pro augmented reality headset, has been a flop with consumers, and the company is already trailing rivals like Meta in the category of lightweight smartglasses.
During Thursday’s earnings call, an analyst cited Tim Cook’s previous anecdote about the advice he received from Apple cofounder Steve Jobs: Don’t ask what I would do, just do the right thing.
What advice is Cook giving CEO-in-waiting Ternus, the analyst asked?
“My advice is that one of the most important decisions he’ll make is where to spend his time. And I would spend it where the greatest benefit to the company and the users are,” Cook said.
“And never forget the north star for the company: We’re about making the best products in the world that really enrich other people’s lives,” he continued. “If you keep focusing on that and make your decisions around that, it will produce a great business and we’ll be able to build more products and do it all over again.”
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