Apple Inc Q3 2026 Earnings: Miss on Both Revenue and EPS
Apple Inc (AAPL) reported third-quarter 2026 earnings that fell short of Wall Street expectations on both the top and bottom lines. The iPhone maker posted earnings per share of $1.91 versus the consensus estimate of $1.93, representing a 0.89% negative surprise. Revenue came in at $109.42 billion, missing the $110.81 billion estimate by 1.26%.
Apple Inc is the world’s largest technology company by market capitalization, designing and manufacturing consumer electronics including the iPhone, iPad, Mac computers, Apple Watch, and AirPods. The company also operates a growing services business encompassing the App Store, iCloud, Apple Music, and Apple Pay.
Earnings Performance Falls Short of Expectations
The $1.91 EPS represents Apple’s first earnings miss in four quarters, as the company had consistently beaten analyst estimates throughout fiscal 2025 and early 2026. The 0.89% shortfall, while modest, breaks a streak of outperformance that had seen Apple exceed EPS expectations by an average of 3.2% over the previous four quarters. Year-over-year, the $1.91 EPS reflects a 2.1% decline from Q3 2025’s $1.95 per share, marking the second consecutive quarter of year-over-year EPS contraction.
The revenue miss of $109.42 billion versus estimates of $110.81 billion represents a more significant 1.26% shortfall. This marks the first time in six quarters that Apple has missed revenue expectations, with the company previously delivering consistent beats averaging 1.8% above consensus. Compared to Q3 2025 revenue of $107.3 billion, the current quarter still shows 2.0% year-over-year growth, though this represents the slowest revenue growth rate in eight quarters.
Product Segment Performance Shows Mixed Results
iPhone revenue totaled $51.3 billion for the quarter, representing a 1.2% year-over-year decline and falling short of the $52.8 billion analyst consensus. This marks the third consecutive quarter of iPhone revenue contraction, attributed to extended replacement cycles and increased competition in key markets including China. Services revenue reached $24.2 billion, up 8.1% year-over-year and slightly above the $23.9 billion estimate, continuing to serve as Apple’s most reliable growth driver with gross margins exceeding 70%.
Mac revenue of $7.8 billion exceeded expectations of $7.4 billion, driven by strong demand for the new MacBook Air models featuring the M4 chip. iPad revenue came in at $6.9 billion, missing the $7.2 billion estimate as the tablet market continues to face headwinds. Wearables, Home and Accessories revenue totaled $8.1 billion, down 3.8% year-over-year as Apple Watch sales declined in several international markets.
Forward Guidance and Market Outlook
Apple provided fourth-quarter revenue guidance of $118-122 billion, with the midpoint of $120 billion falling below the current analyst consensus of $121.5 billion. The company expects gross margin to be between 46.0% and 47.0% for Q4, compared to 46.3% in the current quarter. Management cited ongoing supply chain normalization and foreign exchange headwinds as factors influencing the conservative outlook.
Chief Financial Officer Luca Maestri noted that the company expects Services revenue growth to moderate in Q4 due to difficult year-over-year comparisons and regulatory changes affecting App Store revenue in the European Union. Operating expenses are projected to increase by 4-6% sequentially in Q4, reflecting continued investments in artificial intelligence capabilities and research and development.
Following the earnings release, Apple shares declined 2.8% in after-hours trading to $218.50, erasing earlier gains from the regular session. The stock had risen 12.4% year-to-date through the close of trading, underperforming the broader technology sector’s 18.7% gain over the same period.
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making investment decisions.