Apple today announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016.
The company posted quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share. These results compare to revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.
“Our strong September quarter results cap a very successful fiscal 2016 for Apple,” said Tim Cook, Apple’s CEO, in a statement. “We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record.”
“We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter,” said Luca Maestri, Apple’s CFO, in a statement. “We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program.”
Apple is providing the following guidance for its fiscal 2017 first quarter:
• revenue between $76 billion and $78 billion
• gross margin between 38 percent and 38.5 percent
• operating expenses between $6.9 billion and $7 billion
• other income/(expense) of $400 million
• tax rate of 26 percent
Apple’s board of directors has declared a cash dividend of $0.57 per share of the Company’s common stock. The dividend is payable on November 10, 2016 to shareholders of record as of the close of business on November 7, 2016.
Prior to Apple’s earnings release, analysts had expected:
• September quarter revenue: $46.9 billion
• September per-share earnings: $1.65
• September iPhone sales: 44.8 million
• September Mac sales: 5 million
• September iPad sales: 8.5-9 million.
• December quarter revenue guidance: $74.88 billion
MacDailyNews Take: Looks like iPhone 7/Plus supply issues may have been deep which bodes well for Q117 (current holiday quarter) via delayed sales.
SEE ALSO:
MacDailyNews presents live notes from Apple’s Q416 conference call – October 25, 2016
As predicted/expected, AAPL is being punished in after-hours trading.
Just saw the headline on CNBC in our break room that Apple was negative after-hours. Figured it was just the usual record quarter not going unpunished. So ridiculous.
Apple hasn’t had a record quarter in a while or haven’t you noticed that?
Heh. The false statement gets voted up.
My true statement gets voted down.
Never a truer example of fanboyism. Take your heads out of the sand.
Yeah, the drooling fan boys are in denial, right along with Tim Cook.
FIRE Tim Cook!
Think…opportunity!
I pulled my cash out early today… Of course expecting punishment in a big way. Just to put the money right back in when it starts going up again, just like wall street LOL
In other words, revenue is down again but, because services is up, we are going to focus on that.
Fire Tim Cook!
“revenue between $76 billion and $78 billion”
Much higher than expected for Xmas. This should drive up the price, as soon as the market digests the report.
While common sense would lead a person to think this, you need to remember traders and options players have been deep into the run up of the last two months and they are cashing out on a pretty good report and expectations. That plus unfilled demand for certain iPhone 7 models (which means in analyst speak smaller profits than filling the demand would produce) is producing strong downward pressure on the stock price which is down 1.5-2% in after hours trading.
It’s overnight now and AAPL shares are being pounded HARDER by investors. Clearly the market is distinctly unhappy with the direction Apple has taken and is punishing its share price accordingly.
-3% in pre-market trading and STILL dropping.
The excuse for punishing the stock is they have big phone demand they can’t fill fast enough and therefore did not make as much money as they should have even though they beat the analyst’s projections in all product categories except “other” which is a fairly insignificant classification.
I love this Wall Street Journal article:
“Apple Profit and Revenue Slide as it Copes With Slumping iPhone Sales”
WHAT slumping iPhone sales? They’re at the end of one iPhone cycle and the next cycle is going gangbusters with the iPhone 7 & 7 Plus. How disingenuous about product cycles and tremendous new iPhone sales can you be without looking like a total idiot?
iPhone 7 only started shipping two weeks before the end of the quarter.
disingenuous:
‘not candid or sincere, typically by pretending that one knows less about something than one really does.’
Howe willfully ignorant of English can you be without looking like a total idiot?
Howe stupid of me.
Lesson learned.
Mock me at your leisure Peter.
I deserve it.
Nah you mocked yourself, and did an admirable job of it I might add.
Year to year is down. No fancy words are going to cover that up. I do not know what the next magical product for Apple will be. What they sell now does not seem to do the trick. Other than the iPad Pro the rest are showing their age. The phones (thankfully) are always up to date. The laptops and desktops are technologically tragic. They can do better on both the pads and the ‘puters.
The estimated December quarter numbers are better than the street expected, but they are lower than what I anticipated, even with negative FX adjustments, lower anticipated channel fill compared with last year, and the lawsuit gain. The above is around $4B (and if they don’t have 5 weeks fill then maybe $6B) that has to be deducted from last year to compare this year. It should be noted there is an extra few days this year compared to last year, which should compensate in the other direction.
Why is my estimated revenue higher? The reason is because the 7/7 Plus iPhones are selling much better than the 6s/6s iPhones did. At this point in sales, day 39, the number of 6s/6s Plus phones in circulation was 8%, and the number of 7/7 Plus phones in use is 11.09%. These numbers can be found on Mixpanel. I’ve recently tweaked the base of each cycle to 390M iPhones at this point last year and 465M iPhones this year. This means the iPhone base increased by about 19% this year compared to last year, which doesn’t seem out-of-line given the fact that Apple recently claimed a 25% increase in the year-over-year base of all Apple devices.
There has been 30 days of iPhone sales in this December quarter so far with 61 days left. Around 34M 7/7 Plus iPhones have been activated in this quarter. Last year, with 7 more days of sales in the quarter (day 39 overall or November 2, 2015) there were 22M iPhones activated in that December quarter. So, with less days in the quarter this year there have been 12 million more flagship iPhones sold this year compared to last year (December quarters).
What about the last 7 days? On average there have been around 1.1M 7/7 Plus iPhones activated per day compared with around 600K a day last year. How many total iPhones will be activated by the end of the quarter? I’m estimating Apple will sell around 15 million 6s and SE iPhones in the quarter, so add this number to the 34M 7/+ already activated in the December quarter and this total equals 49M. If they average selling 1M 7/7 Plus iPhones per day for the rest of the quarter then the total number iPhones sold in the December quarter would equal 110M. This seems totally out-of-line with the earnings estimates they just provided, so either Apple is seriously sandbagging this quarter, or they anticipate demand and/or supply will drop from where it currently is. If it does drop they could average 590K activations per day for the rest of the quarter and still sell around 85M, or 10M more than last year. Another possibility is maybe they will adjust inventory, delay channel billing, or something into Q2. Either or,or they are rocking and rolling.
Thanks for this excellent analysis.
YOY are down because a billion dollar company is being lazy with product cycles to the hardware market, unless it’s wireless. THAT is why they are down YOY