New Delhi, July 31 -- SAN FRANCISCO - Apple shares fell 8% in early trading Friday after CEO Tim Cook warned that rising memory costs would continue to squeeze margins into the fourth quarter, overshadowing a record June quarter that beat Wall Street on revenue and iPhone sales.

The stock's decline came even as Apple reported third-quarter revenue of $109.4 billion, a 16% year-over-year increase, and iPhone revenue that grew 22% to a June-quarter record. Investors focused on the company's guidance for Q4 revenue growth of 9% to 11%, below the 12.1% consensus analysts had built into models, as the reason to sell.

Cook framed memory cost pressure as a sustained dynamic rather than a temporary shock. "We see the market pricing for memory c...