Apple's Q3 beats expectations with $42.4B in revenue, 40.4M iPhone sales

Posted:
in AAPL Investors edited July 2016
Though Apple's sales continue to decline year over year, the company's June quarter came in ahead of Wall Street expectations, with the company posting $42.4 billion in revenue and quarterly net income of $7.8 billion.




The key number, as always, was iPhone sales, where Apple shipped a total of 40.4 million units in the three-month span. Those numbers slightly exceeded market hopes, which were pegged at $42.2 billion in revenue and 40 million iPhones.

Still, the June quarter numbers were down from sales of 47.5 million iPhones in the same quarter one year ago, a 15 percent decrease in units. Revenue was also down from $49.6 billion in the June quarter of 2015.

iPad sales for the third fiscal quarter of 2016 were just shy of 10 million units, a 9 percent increase in revenue but a 7 percent decrease in total sales, reflecting the higher average selling price of the iPad Pro lineup.

Mac sales, meanwhile, were at 4.3 million, an 11 percent drop from a year ago. Gross margin was 38 percent and earnings per share were $1.42.

"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," Apple Chief Executive Tim Cook said. "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."

Looking ahead to its fiscal 2016 fourth quarter, Apple has guided revenue between $45.5 billion and $47.5 billion, and gross margin between 37.5 percent and 38 percent. Operating expenses are expected to fall between $6.05 billion and $6.15 billion, with other income of $350 million, and a tax rate of 25.5 percent.

The company has also declared a cash dividend of 57 cents per share that will be payable on Aug. 11 to shareholders of record as of close of business on Aug. 8.

"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 Apple Chief Financial Officer 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 will discuss the results with analysts and members of the press in a conference call scheduled for 2 p.m. Eastern, 5 p.m. Pacific.
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Comments

  • Reply 1 of 36
    rogifan_newrogifan_new Posts: 3,979member
    iPhone sales beat expectations. Stock is up 5% after hours. Once again proving Wall Street cares about one thing and one thing only, how many iPhones Apple sold. If they were dead on or slightly under the stock would probably be down 5% after hours.
    jay-tTurboPGTSpamSandwichcali
  • Reply 2 of 36
    irelandireland Posts: 17,584member
    The Mac drop is totally understandable. Lots of Mac updates due: new MBP, new Mac Pro, new display, new lots of stuff. iPad seems to be levelling off at 10M per quarter—not bad.
    edited July 2016 baconstangmac fan
  • Reply 3 of 36
    Nobody seems to talk about 19 percent growth in services. Before too long, Apple service will top Googles ads.
    jahblademonstrosityjay-tVChile123jony0TurboPGTcalibaconstangpalomineh2p
  • Reply 4 of 36
    buckalecbuckalec Posts: 192member
    Watching the haters on Bloomberg - "...needs an Amazon Echo...", "Apples China Problem"....   Business news is beyond a joke.
    Looking forward to the conference call
    jahbladenolamacguyTurboPGTcalibaconstangmac fanbadmonkbrucemcpatchythepirate
  • Reply 5 of 36
    thrangthrang Posts: 765member
    I like Tim, but can he stop using the word "thrilled" in virtually every call or presentation? Get a thesaurus...
    jackansilatifbpjony0fotoformat
  • Reply 6 of 36
    irelandireland Posts: 17,584member
    iPhone sales beat expectations. Stock is up 5% after hours. Once again proving Wall Street cares about one thing and one thing only, how many iPhones Apple sold.
    Wall St. doesn't care about Apple, never mind iPhone sales. WS cares only about money. Given how barely estimates were beaten by its safe to say estimates were met—therefore stock should in fact not rise or fall, but WS doesn't care for that. 8,000,000 made homeless after crash of 2008. WS cares about one thing. Many should have been jailed for what they did. But WS are so heavily involved with your government that's not going to happen. WS is one of the evils of the world. If someone granted me 5 wishes: world peace, enough food for each person and I'd consider Apple is now a private company as my third wish.
    edited July 2016 elijahgjay-tlatifbpjony0TurboPGTcalifotoformatbaconstang[Deleted User]
  • Reply 7 of 36
    lkrupplkrupp Posts: 7,060member
    If you poke around the financial blogs you'll see the spin is about 50/50. Half saying beating the reduced expectations is good news and means Apple stock is okay to buy again. The other half saying the report proves Apple's iPhone business is on trouble. Analysts, gotta love 'em.

    Apple Inc. proudly going out of business for 40 years and counting! Any day now, any day.
    ai46nolamacguychiacalibaconstangmac fan[Deleted User]brucemc
  • Reply 8 of 36
    mtbnutmtbnut Posts: 195member
    Any note on whether anything they make will get updated in the next 12-60 months? IIRC, the Bondi Blue iMac is still on their website!
    jackansi
  • Reply 9 of 36
    mtbnutmtbnut Posts: 195member
    thrang said:
    I like Tim, but can he stop using the word "thrilled" in virtually every call or presentation? Get a thesaurus...
    "Look at the little monkey, don't look at our non-updated products!"
    edited July 2016 mwhitejackansifreshmaker
  • Reply 10 of 36
    rogifan_newrogifan_new Posts: 3,979member
    Based on Tim's comments about iPhone SE it's pretty clear that people were looking for a cheaper iPhone. Apple got more first time smartphone buyers and more switchers than ever. I'll bet the 5C would have been more of a success if it hit the price point of the SE.
    jay-tlatifbpjony0Habi_tweet
  • Reply 11 of 36
    rogifan_newrogifan_new Posts: 3,979member
    Stock up almost 7% after hours. I'm noticing a much more positive Tim Cook this quarter than last. Perhaps someone told him its better to be more upbeat on these calls.
    cali
  • Reply 12 of 36
    jungmarkjungmark Posts: 6,687member
    Not surprising. The upgrade from the 5S to the 6 was huge! From the 6 to the 6S, not so much. I think the 6S to 7 will be at least flat. 
    baconstang
  • Reply 13 of 36
    davendaven Posts: 525member
    jungmark said:
    Not surprising. The upgrade from the 5S to the 6 was huge! From the 6 to the 6S, not so much. I think the 6S to 7 will be at least flat. 
    The time between iOS device upgrades will continue to lengthen just as the PC upgrade cycle has lengthened. The products are relative mature and Apple upgrades the OS of older devices. You can't say that about the competing phone and tablet operating system where you are locked into the OS that came with your device in most cases. Frankly I prefer to be able to update my operating system.
    jackansibaconstang
  • Reply 14 of 36
    I never buy more after a 6% bump, but this ices the idea Apple is Blackberry.  Services will be the size of a Fortune 100 this year.  They reduced the channel by 4 million phones.  All the news about nobody buying iPhones was BS.  This will go higher.
    jakebchiacalibaconstang
  • Reply 15 of 36
    redefilerredefiler Posts: 323member
    ireland said:
    iPhone sales beat expectations. Stock is up 5% after hours. Once again proving Wall Street cares about one thing and one thing only, how many iPhones Apple sold.
    Wall St. doesn't care about Apple, never mind iPhone sales. WS cares only about money. Given how barely estimates were beaten by its safe to say estimates were met—therefore stock should in fact not rise or fall, but WS doesn't care for that. 8,000,000 made homeless after crash of 2008. WS cares about one thing. Many should have been jailed for what they did. But WS are so heavily involved with your government that's not going to happen. WS is one of the evils of the world. If someone granted me 5 wishes: world peace, enough food for each person and I'd consider Apple is now a private company as my third wish.
    Wall St. is just a speculative market, and like any market there are good and bad people.

    However, spare us the tired moralizing, and overly generalized screed.  When we need a lecture from a tiny postage stamp sized, agrarian country, we'll let you know.
    latifbp
  • Reply 16 of 36
    fallenjtfallenjt Posts: 3,976member
    thrang said:
    I like Tim, but can he stop using the word "thrilled" in virtually every call or presentation? Get a thesaurus...
    I noticed that too...lol
  • Reply 17 of 36
    jakebjakeb Posts: 557member
    mtbnut said:
    thrang said:
    I like Tim, but can he stop using the word "thrilled" in virtually every call or presentation? Get a thesaurus...
    "Look at the little monkey, don't look at our non-updated products!"
    It's an earnings report. The idea is to report on earnings. That's what he did.
    londorlatifbpanton zuykovcalibaconstangmac fan
  • Reply 18 of 36
    flaneurflaneur Posts: 4,509member
    mtbnut said:
    thrang said:
    I like Tim, but can he stop using the word "thrilled" in virtually every call or presentation? Get a thesaurus...
    "Look at the little monkey, don't look at our non-updated products!"
    More like "the little monkey only hears the chatter, but doesn't understand the meaning."
    cali
  • Reply 19 of 36
    flaneurflaneur Posts: 4,509member

    redefiler said:
    ireland said:
    Wall St. doesn't care about Apple, never mind iPhone sales. WS cares only about money. Given how barely estimates were beaten by its safe to say estimates were met—therefore stock should in fact not rise or fall, but WS doesn't care for that. 8,000,000 made homeless after crash of 2008. WS cares about one thing. Many should have been jailed for what they did. But WS are so heavily involved with your government that's not going to happen. WS is one of the evils of the world. If someone granted me 5 wishes: world peace, enough food for each person and I'd consider Apple is now a private company as my third wish.
    Wall St. is just a speculative market, and like any market there are good and bad people.

    However, spare us the tired moralizing, and overly generalized screed.  When we need a lecture from a tiny postage stamp sized, agrarian country, we'll let you know.
    A tiny country that has given us as good poetizers on injustice as any other.
    edited July 2016 baconstangpalomine
  • Reply 20 of 36
    flaneurflaneur Posts: 4,509member

    Stock up almost 7% after hours. I'm noticing a much more positive Tim Cook this quarter than last. Perhaps someone told him its better to be more upbeat on these calls.
    He also slipped in a hint that he has a few wild cards up his sleeve. Something about some great new products in the pipeline.

    Again. And he always means it . . .
    calibaconstangmac fanpalomineJanNL
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