Apple Q1 results likely to highlight iPhone, Services strength
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Apple (NASDAQ:AAPL) is set to report fiscal first-quarter earnings after the market closes on Thursday and Wall Street expects the world's most valuable company to show strength in its iPhone and Services businesses ahead of the company unveiling the "widest array" of new hardware products later this year.

Wedbush Securities analyst Dan Ives believes that the Tim Cook-led company will beat Wall Street estimates for both earnings and revenue, as he notes iPhone 13 sales were "robust" around the globe during the holiday season, despite the global chip shortage. He estimates Apple sold more than 40 million iPhones during the quarter, which would be a record for the company.
Ives added that growth in the Chinese market is still the "fuel in the engine" for Apple, as he estimates Apple gained 2.5% market share over the past 12 months, thanks in part to the 5G iPhone 12 and the iPhone 13 product cycle.
Apple could also be helped as the iPhone's average selling price continues to be "very positive," due to strong sales of the Pro and Pro Max, Ives explained.
A consensus of Wall Street analysts expect the company to earn $1.89 a share on $118.4 billion in revenue during the quarter.
Investors will likely also focus on the health of Apple's Services business, which includes the App Store, Apple Music, iCloud and other products. Ives believes that the Services business is worth $1.5 trillion, generating $75 billion in annual revenue, as it "is showing no signs of slowing down as the Street further appreciates this Apple renaissance of growth story into 2022," the analyst added.
Ives rates Apple (AAPL) outperform with a $200 price target.
Raymond James analyst Chris Caso, who also rates shares outperform with a $185 price target, believes that iPhone sales were driven by improved supply, noting that supply chain bottlenecks caused by the chip shortage and other issues look to be resolved.
"Recall that on their earnings call, [Apple] noted that supply constraints would negatively impact December quarter revenue by more than $6 billion," Caso explained. "While [Apple] isnât likely to fully recapture lost revenue after Christmas, we do think that results in a better than seasonal 1Q, and the improved supply will also benefit the Chinese New Year holiday in Asia."
Caso is also bullish on Apple's Services business, though he notes that it is difficult to estimate the revenue, given Apple's limited disclosure about how different products, like Fitness+, AppleTV+, Apple News and others are performing.
However, he believes the App Store, which likely saw rising sales ahead of the company's earnings results, continues to grow at a healthy clip, citing data from Sensor Tower, which said that commissions from the App Store grew 17% year-over-year to $25.4 billion in 2021.
Earlier this month, Apple's (AAPL) Chief Executive Tim Cook spoke to Texas Senator Ted Cruz over some antitrust bills that are being debated in the Senate, including one that would prohibit platforms from favoring their own products over others.