Apple exceeded expectations in its fiscal first-quarter earnings report, with revenue climbing 16% year-over-year, prompting a 1% increase in shares during extended trading. The company reported earnings per share (EPS) of $2.84, surpassing analysts’ estimates of $2.67, while revenue reached $143.76 billion, outpacing the forecast of $138.48 billion.
A closer look at Apple’s performance reveals a robust showing across its product categories. iPhone revenue surged to $85.27 billion, dwarfing the projected $78.65 billion. Although Mac revenue fell short at $8.39 billion compared to expectations of $8.95 billion, the iPad sector performed well, generating $8.60 billion-above the estimated $8.13 billion. The segment covering wearables, home, and accessories saw revenue decline to $11.49 billion, slightly below the estimated $12.04 billion. Services revenue remained strong at $30.01 billion, just shy of the forecasted $30.07 billion, while the gross margin for the quarter reached 48.2%, exceeding the estimated 47.5%.
Looking ahead, Apple’s Chief Financial Officer Kevan Parekh projected second-quarter revenue growth between 13% and 16% year-over-year, translating to an estimated $107.8 billion to $110.66 billion, exceeding the analysts’ consensus of $104.84 billion. However, Apple anticipates constrained iPhone supply during this period. The company expects its Services unit to maintain a growth rate similar to the 14% seen in the December quarter.
Apple’s net income stood at $42.1 billion, equating to $2.84 per share, a notable increase from the previous year’s $36.33 billion, or $2.40 per share. The leap in iPhone revenue-23% higher than last year-reflects robust demand for the recently launched iPhone 17 models, which Apple CEO Tim Cook described as having “staggering” demand.
In the lucrative Chinese market, including Taiwan and Hong Kong, sales soared by 38% to $25.53 billion, driven largely by strong iPhone sales. Cook reported record levels of upgraders and substantial growth from new customers who previously owned devices from other brands.
Despite the impressive iPhone numbers, Apple’s Mac sales fell short of Wall Street’s expectations, reflecting a 7% decline from the prior year. The iPad segment grew by 6%, fueled by a high proportion of first-time buyers. The combined sales of accessories like AirPods and the Apple Watch also slightly dropped, missing expectations.
Apple’s Services segment saw a healthy 14% growth, amassing $26.34 billion in revenue. This segment includes subscriptions like Apple TV, iCloud, and revenue from advertising partnerships. In December, Apple TV’s viewership reportedly rose by 36% compared to the previous year.
On the innovation front, Apple is set to collaborate with Google on integrating its Gemini AI model to enhance its software capabilities. Unlike competitors like Meta and Microsoft, who are significantly ramping up AI investments, Apple has opted for a measured approach. Cook emphasized, “We have absolutely the best platforms in the world for AI.”
In capital expenditures, Apple recorded $2.37 billion for the quarter, down from $2.94 billion, while research and development spending increased to $10.89 billion. Given the rising demand for storage and memory driven by AI advancements, concerns arose regarding how Apple will manage increased component costs.
Amid ongoing supply chain challenges, Cook noted that predicting the balance between supply and demand remains difficult. Notably, Apple expects the impact of rising memory prices to be more pronounced in the current quarter. Parekh revealed that Apple expended nearly $32 billion on share repurchases and dividends during this period, underscoring its strong financial position.
Original Source: https://www.cnbc.com/2026/01/29/apple-aapl-earnings-report-q1-2026.html
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Publish Date: 2026-01-30 06:06:00
