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[] Apple Reports Q1 FY 2016 Results: Record Revenue Despite Flat iPhone Sales - - different look at memory


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Old 27-01-2016, 06:34 PM   #1
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[] Apple Reports Q1 FY 2016 Results: Record Revenue Despite Flat iPhone Sales

Today Apple announced their quarter 1 earnings, and once again Apple had record revenue of $75.9 billion, and a record quarterly profit of $18.4 billion. Revenue is up 2% compared to Q1 2015, and 66% of the quarter’s revenue came from International sales. Gross margin for the quarter was 40.1%, or $30.4 billion, up from 39.9% and $29.7 billion last year. Operating income was down slightly to $24.171 billion, but net income was $18.361 billion, which is up 1.8% year-over-year.

Apple Q1 2016 Financial Results (GAAP) Q1'2016
Q1'2015 Revenue (in Billions USD) $75.872 $51.501 $74.599 Gross Margin (in Billions USD) $30.423 $20.548 $29.741 Operating Income (in Billions USD) $24.171 $14.623 $24.246 Net Income (in Billions USD) $18.361 $11.124 $18.024 Margins 40.1% 39.9% 39.9% Earnings per Share (in USD) $3.30 $1.96 $3.08 Although the company had record iPhone sales, it was only just a record. It is still a massive part of their business, and for the quarter Apple sold 74.779 million iPhones, with an average selling price of $691. Compared to the year ago quarter, this is a gain of 311,000 iPhones. That’s a pretty small gain, and percentage wise Apple calls it a year-over-year change of 0%. Although the growth is not there, that is still a huge amount of devices sold. iPhones accounted for $51.6 billion in Apple’s revenue this quarter.

iPad has been a tricky market for Apple. After initial sales figures with huge growth, the platform stopped growing and started having a drop in sales quite a few quarters ago. The release of the iPad Pro was hoped to kick-start this, but, at least for the launch quarter, that has not been the case. iPad sales continued their fall, and in fact had an even larger drop of 25% year-over-year to 16.1 million devices. Revenue from iPads dropped 21% to $7.084 billion.

Mac sales were also down, with a year-over-year drop of 4% to 5.3 million devices sold. Revenue went down slightly less than that, with just a 3% drop, to $6.7 billion. Considering the slowdown in the PC market, the drop is less than what we’ve seen from the PC market as a whole, but still a drop nonetheless. Regardless, Apple is likely pretty happy with Mac sales, which have weathered the storm better than many other brands. Dividing revenue by sales leads to an average of $1269.95 per Mac sale, which is territory most other OEMs would love to be in.

Apple Q1 2016 Device Sales (thousands) Q1'2016
Q1'2015 Seq Change Year/Year Change iPhone 74,779 48,046 74,468 +56% 0% iPad 16,122 9,883 21,419 +63% -25% Mac 5,312 5,709 5,519 -7% -4% Services, which includes the App Store, AppleCare, Apple Pay, licensing, and other services, had a much better quarter. This segment had revenue of $6.056 billion for the quarter, which is a 26% increase year-over-year.

Finally, Other Products, which includes Apple TV, Apple Watch, Beats, iPod, and accessories, had another great gain of 62% in revenue to $4.351 billion. Apple doesn’t break out individual numbers for this segment, but considering the Apple Watch did not exist in the 2015 numbers, you can be sure a lot of the gain is from this new product introduction.

Apple Q1 2016 Revenue by Product (billions) Q1'2016 Q4'2015 Q1'2015 Revenue for current quarter iPhone $51.635 $32.209 $51.182 68.05% iPad $7.084 $4.726 $8.985 9.34% Mac $6.746 $6.882 $6.944 8.89% iTunes/Software/Services $6.056 $5.086 $4.799 7.98% Other Products $4.351 $3.048 $2.689 5.73% Apple will pay a dividend of $0.52 per share, payable to shareholders of record as of February 8. The payment will be made on February 11. Apple paid back $9 billion to shareholders this quarter, through share buybacks and dividend payments. They have now paid out $153 billion of their $200 billion capital return program.

Looking forward to next quarter, the forecast is decidedly down, with Apple expecting revenue of $50-53 billion, and margins of 39-39.5%. In Q2 2015, Apple had revenue of $58 billion, so this is a big drop. As always, forecasts are just that, and we’ll have to wait for their actual numbers to see how they do.

Apple had a record quarter, but flat iPhone sales, and a drop in iPad and Mac sales are definite sour notes on this otherwise great quarter. Apple did say that currency rates have had a big impact this quarter, and “$100 of Apple’s non-U.S. dollar revenue in Q4’14 translates into only $85 U.S. dollars today”, which is going to be a big factor in earnings. Looking at a Constant Currency calculation, revenue would have been up 8% instead of 2%. Still, for a company with a net income higher than the revenue of many other players in the tech space, I think they will be OK.

Source: Apple Investor Relations

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