Apple's Q1 Earnings: Strong iPhone 17 Shipment to Aid Top-Line Growth

Apple’s AAPL first-quarter fiscal 2026 results, to be reported on Jan. 29, are expected to have benefited from strong iPhone 17 sales. The company expects iPhone sales to grow in double digits year over year in the to-be-reported quarter. The device accounted for 47.8% of net sales in the fourth quarter of fiscal 2025, wherein sales increased 6.1% year over year to $49.03 billion. 

iPhone sales have been benefiting from strong iPhone 17 sales as well as iPhone 16 shipments in Japan, India and Southeast Asia, per Counterpoint data. Apple led the smartphone market with 20% share in calendar 2025, and shipments increased 10% year over year. The Zacks Consensus Estimate for fiscal first-quarter iPhone net sales is pegged at $78.03 billion, suggesting roughly 13% year-over-year growth.
 

Apple Inc. Revenue (TTM)

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Services Growth to Ride on Apple TV+, Strong Install Base

The Services business is expected to have benefited from a growing installed base of devices as well as subscriber base of its offerings, including Apple TV+, Apple Pay, Apple Music and more. Apple’s streaming business, Apple TV+, is benefiting from a strong content portfolio despite stiff competition in the streaming space from the likes of Disney DIS, Netflix NFLX and Peacock. 

Disney’s unparalleled IP portfolio spanning Marvel, Star Wars, Pixar, and classic animation provides sustainable competitive advantages and multiple revenue monetization opportunities across streaming. Netflix surpassed the 325 million paid memberships milestone during the fourth quarter of 2025. Netflix’s 2026 content strategy targets sustained membership growth through returning franchises like Bridgerton Season 4, One Piece Season 2 and The Night Agent Season 3, alongside new productions, including Pride & Prejudice and Greta Gerwig's Narnia.

Revenues from Apple TV+ are reported under Apple’s Services business, which accounted for 28.1% of fourth-quarter fiscal 2025 sales. The Zacks Consensus Estimate for first-quarter fiscal 2026 Services is pegged at $30 billion, suggesting roughly 14% year-over-year growth.

Apple to Suffer From Modest Y/Y Mac Sales Growth

The PC segment climbed up in the fourth quarter of calendar 2025. Per IDC, Apple had a market share of 9.3%, down 90 basis points (bps) on a year-over-year basis. Shipment grew 0.2% year over year to 7.1 million. Per Gartner, Apple had a market share of 9.4%, down 30 bps year over year.

In terms of shipments, Apple trails Dell Technologies’ DELL, Lenovo’s and HP’s growth of 18.2%, 14.4% and 12.1%, respectively, per IDC data. Dell Technologies’ market share expanded 110 bps on a year-over-year basis. According to Gartner’s list, Lenovo was placed at the #1 spot with shipment growth of 14.3%, trailed by Apple’s 5.7%, HP’s 12.1% and Dell Technologies’ 18.2% growth.

The Zacks Consensus Estimate for fiscal first-quarter Mac net sales is pegged at $9.07 billion, suggesting 0.9% year-over-year growth.

Apple’s iPad Sales to Increase Y/Y

iPad accounted for roughly 6.8% of fiscal first-quarter net sales. iPad revenues are expected to benefit from improving demand for the new 11-inch and 13-inch iPad Pro that Apple launched in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal first-quarter iPad net sales is pegged at $8.49 billion, suggesting a 5% year-over-year increase.

Zacks Rank

Apple currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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