Services Revenue Grows 19% as App Store Hits All-Time Record
Apple® today announced financial results for its fiscal 2016
third quarter ended June 25, 2016. The Company posted quarterly
revenue of $42.4 billion and quarterly net income of $7.8 billion,
or $1.42 per diluted share. These results compare to revenue of
$49.6 billion and net income of $10.7 billion, or $1.85 per diluted
share, in the year-ago quarter. Gross margin was 38 percent
compared to 39.7 percent in the year-ago quarter. International
sales accounted for 63 percent of the quarter’s revenue.
“We are pleased to report third quarter results that reflect
stronger customer demand and business performance than we
anticipated at the start of the quarter,” said Tim Cook, Apple’s
CEO. “We had a very successful launch of iPhone SE and we’re
thrilled by customers’ and developers’ response to software and
services we previewed at WWDC in June.”
“Our Services business grew 19 percent year-over-year and App
Store revenue was the highest ever, as our installed base continued
to grow and transacting customers hit an all-time record,” said
Luca Maestri, Apple’s CFO. “We returned over $13 billion to
investors through share repurchases and dividends, and we have now
completed almost $177 billion of our $250 billion capital return
program.”
Apple is providing the following guidance for its fiscal 2016
fourth quarter:• revenue between $45.5 billion and $47.5 billion•
gross margin between 37.5 percent and 38 percent• operating
expenses between $6.05 billion and $6.15 billion• other
income/(expense) of $350 million• tax rate of 25.5 percent
Apple’s board of directors has declared a cash dividend of $.57
per share of the Company’s common stock. The dividend is payable on
August 11, 2016 to shareholders of record as of the close of
business on August 8, 2016.
Apple will provide live streaming of its Q3 2016 financial
results conference call beginning at 2:00 p.m. PDT on July 26, 2016
at www.apple.com/investor/earnings-call/. This webcast will also be
available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including
without limitation those about the Company’s estimated revenue,
gross margin, operating expenses, other income/(expense), and tax
rate. These statements involve risks and uncertainties, and actual
results may differ. Risks and uncertainties include without
limitation the effect of competitive and economic factors, and the
Company’s reaction to those factors, on consumer and business
buying decisions with respect to the Company’s products; continued
competitive pressures in the marketplace; the ability of the
Company to deliver to the marketplace and stimulate customer demand
for new programs, products, and technological innovations on a
timely basis; the effect that product introductions and
transitions, changes in product pricing or mix, and/or increases in
component costs could have on the Company’s gross margin; the
inventory risk associated with the Company’s need to order or
commit to order product components in advance of customer orders;
the continued availability on acceptable terms, or at all, of
certain components and services essential to the Company’s business
currently obtained by the Company from sole or limited sources; the
effect that the Company’s dependency on manufacturing and logistics
services provided by third parties may have on the quality,
quantity or cost of products manufactured or services rendered;
risks associated with the Company’s international operations; the
Company’s reliance on third-party intellectual property and digital
content; the potential impact of a finding that the Company has
infringed on the intellectual property rights of others; the
Company’s dependency on the performance of distributors, carriers
and other resellers of the Company’s products; the effect that
product and service quality problems could have on the Company’s
sales and operating profits; the continued service and availability
of key executives and employees; war, terrorism, public health
issues, natural disasters, and other circumstances that could
disrupt supply, delivery, or demand of products; and unfavorable
results of legal proceedings. More information on potential factors
that could affect the Company’s financial results is included from
time to time in the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of the Company’s public reports filed with the SEC, including the
Company’s Form 10-K for the fiscal year ended September 26, 2015,
its Form 10-Q for the fiscal quarter ended December 26, 2015, its
Form 10-Q for the fiscal quarter ended March 26, 2016, and its Form
10-Q for the fiscal quarter ended June 25, 2016 to be filed with
the SEC. The Company assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
Apple revolutionized personal technology with the introduction
of the Macintosh in 1984. Today, Apple leads the world in
innovation with iPhone, iPad, Mac, Apple Watch and Apple TV.
Apple’s four software platforms — iOS, macOS, watchOS and tvOS —
provide seamless experiences across all Apple devices and empower
people with breakthrough services including the App Store, Apple
Music, Apple Pay and iCloud. Apple’s 100,000 employees are
dedicated to making the best products on earth, and to leaving the
world better than we found it.
NOTE TO EDITORS: For additional information visit Apple’s PR
website (www.apple.com/pr), or call Apple’s Media Helpline at (408)
974-2042.
© 2016 Apple Inc. All rights reserved. Apple and the Apple logo
are trademarks of Apple. Other company and product names may be
trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except number of shares
which are reflected in thousands and per share amounts)
Three Months Ended Nine Months Ended
June 25, 2016
June 27, 2015
June 25, 2016
June 27, 2015
Net sales $ 42,358 $ 49,605 $ 168,787 $ 182,214 Cost of sales (1)
26,252 29,924 102,337 109,136 Gross margin
16,106 19,681 66,450 73,078 Operating
expenses: Research and development (1) 2,560 2,034 7,475 5,847
Selling, general and administrative (1) 3,441 3,564
10,712 10,624 Total operating expenses 6,001 5,598
18,187 16,471 Operating income 10,105 14,083
48,263 56,607 Other income/(expense), net 364 390 921
846 Income before provision for income taxes 10,469 14,473
49,184 57,453 Provision for income taxes 2,673 3,796
12,511 15,183 Net income $ 7,796 $ 10,677 $
36,673 $ 42,270 Earnings per share: Basic $ 1.43 $
1.86 $ 6.66 $ 7.30 Diluted $ 1.42 $ 1.85 $ 6.62 $ 7.25
Shares used in computing earnings per share: Basic 5,443,058
5,729,886 5,505,456 5,788,922 Diluted 5,472,781 5,773,099 5,535,931
5,829,920 Cash dividends declared per share $ 0.57 $ 0.52 $
1.61 $ 1.46
(1) Includes share-based compensation
expense as follows:
Cost of sales $ 188 $ 148 $ 583 $ 430 Research and development $
479 $ 388 $ 1,413 $ 1,146 Selling, general and administrative $ 387
$ 320 $ 1,184 $ 1,095
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(In millions, except number of shares
which are reflected in thousands and par value)
June 25, 2016
September 26,2015
ASSETS: Current assets: Cash and cash equivalents $ 18,237 $ 21,120
Short-term marketable securities 43,519 20,481 Accounts receivable,
less allowances of $55 and $63, respectively 11,714 16,849
Inventories 1,831 2,349 Vendor non-trade receivables 7,328 13,494
Other current assets 11,132 15,085 Total current
assets 93,761 89,378 Long-term marketable securities 169,764
164,065 Property, plant and equipment, net 25,448 22,471 Goodwill
5,261 5,116 Acquired intangible assets, net 3,506 3,893 Other
non-current assets 7,862 5,556 Total assets $ 305,602
$ 290,479 LIABILITIES AND SHAREHOLDERS’
EQUITY: Current liabilities: Accounts payable $ 26,318 $ 35,490
Accrued expenses 20,820 25,181 Deferred revenue 8,352 8,940
Commercial paper 12,496 8,499 Current portion of long-term debt
3,500 2,500 Total current liabilities 71,486 80,610
Deferred revenue, non-current 3,064 3,624 Long-term debt
68,939 53,463 Other non-current liabilities 35,572 33,427
Total liabilities 179,061 171,124
Commitments and contingencies Shareholders’ equity: Common
stock and additional paid-in capital, $0.00001 par value:
12,600,000 shares authorized; 5,393,165 and 5,578,753 shares issued
and outstanding, respectively 30,106 27,416 Retained earnings
96,542 92,284 Accumulated other comprehensive income/(loss) (107 )
(345 ) Total shareholders’ equity 126,541 119,355
Total liabilities and shareholders’ equity $ 305,602 $
290,479
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Nine Months Ended June 25, 2016
June 27, 2015 Cash and cash equivalents, beginning of
the period $ 21,120 $ 13,844 Operating
activities: Net income 36,673 42,270 Adjustments to reconcile net
income to cash generated by operating activities: Depreciation and
amortization 7,957 8,138 Share-based compensation expense 3,180
2,671 Deferred income tax expense 5,191 2,820 Changes in operating
assets and liabilities: Accounts receivable, net 5,135 7,090
Inventories 518 69 Vendor non-trade receivables 6,166 222 Other
current and non-current assets 1,143 2,286 Accounts payable (9,622
) (3,263 ) Deferred revenue (1,148 ) 1,040 Other current and
non-current liabilities (5,495 ) 4,448 Cash generated by
operating activities 49,698 67,791 Investing
activities: Purchases of marketable securities (112,068 ) (137,524
) Proceeds from maturities of marketable securities 14,915 9,916
Proceeds from sales of marketable securities 69,926 80,635 Payments
made in connection with business acquisitions, net (146 ) (230 )
Payments for acquisition of property, plant and equipment (8,757 )
(7,629 ) Payments for acquisition of intangible assets (753 ) (201
) Payments for strategic investments (1,376 ) — Other (321 ) 134
Cash used in investing activities (38,580 ) (54,899 )
Financing activities: Proceeds from issuance of common stock 247
324 Excess tax benefits from equity awards 391 684 Payments for
taxes related to net share settlement of equity awards (1,361 )
(1,332 ) Payments for dividends and dividend equivalents (9,058 )
(8,597 ) Repurchases of common stock (23,696 ) (22,000 ) Proceeds
from issuance of term debt, net 17,984 21,312 Repayments of term
debt (2,500 ) — Change in commercial paper, net 3,992 (1,808
) Cash used in financing activities (14,001 ) (11,417 )
Increase/(decrease) in cash and cash equivalents (2,883 ) 1,475
Cash and cash equivalents, end of the period $ 18,237
$ 15,319 Supplemental cash flow disclosure: Cash paid
for income taxes, net $ 8,990 $ 10,604 Cash paid for interest $ 892
$ 427
Apple Inc. Q3 2016 Unaudited Summary
Data (Units in thousands, Revenue in millions)
Q3 2016 Q2 2016 Q3 2015
Sequential Change Year/Year Change
Operating Segments Revenue
Revenue Revenue
Revenue Revenue Americas
$17,963 $19,096 $20,209 - 6% - 11% Europe 9,643 11,535 10,342 - 16%
- 7% Greater China 8,848 12,486 13,230 - 29% - 33% Japan 3,529
4,281 2,872 - 18% 23% Rest of Asia Pacific 2,375 3,159 2,952 - 25%
- 20%
Total Apple $42,358
$50,557 $49,605 - 16% - 15%
Q3 2016 Q2 2016 Q3 2015
Sequential Change Year/Year Change Product
Summary Units Revenue
Units Revenue
Units Revenue
Units Revenue
Units Revenue iPhone (1)
40,399 $24,048 51,193 $32,857 47,534 $31,368 - 21% - 27% - 15% -
23% iPad (1) 9,950 4,876 10,251 4,413 10,931 4,538 - 3% 10% - 9% 7%
Mac (1) 4,252 5,239 4,034 5,107 4,796 6,030 5% 3% - 11% - 13%
Services (2) 5,976 5,991 5,028 0% 19% Other Products (1)(3) 2,219
2,189 2,641 1% - 16%
Total Apple
$42,358 $50,557 $49,605 - 16% -
15%
(1)
Includes deferrals and amortization of
related software upgrade rights and non-software services.
(2)
Includes revenue from Internet Services,
AppleCare, Apple Pay, licensing and other services.
(3)
Includes sales of Apple TV, Apple Watch,
Beats products, iPod and Apple-branded and third-party
accessories.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726006434/en/
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comJoan Hoover,
408-974-4570hoover1@apple.com
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2023 to Apr 2024