Apple earns $46.9B in revenue on sales of 45.5M iPhones, edging market expectations

Posted:
in AAPL Investors edited October 2016
Apple on Tuesday revealed the results of its fourth quarter of fiscal 2016, in which the company sold 45.5 million iPhones on its way to $9 billion in net income, coming in just slightly ahead of expectations on Wall Street.




Revenue for the quarter reached $46.9 billion, down from $51.5 billion a year ago, but also ahead of market consensus that Thomson Reuters pegged at $46.89. Earnings per share came in at $1.67, also slightly ahead of Wall Street's expectation of $1.65.

As usual, the iPhone was the main cash cow for Apple. The 45.5 million sold were slightly ahead of what investors anticipated, at 4 million.

But the company also spotlighted its services revenue, which grew 24 percent to an all-time quarterly record of $6.3 billion.

One area where Apple's earnings did disappoint relative to expectations was gross margins --?they were at 38 percent, compared to 39.9 percent a year ago.

The conclusion of the fourth quarter marks the first-ever year where iPhone sales declined compared to the prior. iPhone units were down from 48 million in the same period a year ago.

iPad sales for the quarter were 9.3 million, a 6 percent decrease from a year prior. And the Mac hit sales of 4.9 million, off 14 percent from the same period in 2015.

"Our strong September quarter results cap a very successful fiscal 2016 for Apple," Apple Chief Executive Tim Cook said. "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."

Looking ahead to the first quarter of fiscal 2017, Apple is guiding the following:
  • 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
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Comments

  • Reply 1 of 41
    The strangest thing about these results is that it would seem to indicate a declining ability to satisfy demand, given that the new phone was on the market for longer than the previous model last year, and they had a backlog of orders the whole time, so demand was not a problem.

    I may have to stop laughing at the annual "supply constraints limit availability at launch" articles.
    palominemagman1979freshmakerbadmonk
  • Reply 2 of 41
    mubailimubaili Posts: 385member
    well, 30% drop in Greater China. that one is going to hurt. iPhone 7 will most certainly do worse than iPhone 6S. Apple needs to put top notch people in China to understand better. Chinese market is very cutting throat with some many ambitious local players. Was Apple blindsided by its own "flaw" data as not to see the trend in China? Once lost I am not sure Apple to reacquire those customers even with a "superior" iPhone 8. TC's many visits to China doesn't bear any fruit with the China customers. Those trump the sameness of iPhone 7 just don't understand the meaning of iPhone being a status symbol. Comparing iPhone 7's sameness to Porche 911's sameness is beyond foolish.
    cali
  • Reply 3 of 41
    LarsiebabieLarsiebabie Posts: 1unconfirmed, member
    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
  • Reply 4 of 41
    croprcropr Posts: 898member
    "Our strong September quarter results cap a very successful fiscal 2016 for Apple," Apple Chief Executive Tim Cook said. "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."
    I think the important part here is what Tim did not say. I was expecting something like: "we're thrilled by the sales  uptake of iPhone7 and Apple Watch 2".  Maybe he is slightly disappointed by the figures.
  • Reply 5 of 41
    I think the market is on longterm PMS when it comes to Apple. I feel every earning reason we go through the same rhetoric. It feels like they are replaying the same tape. So they had profit margin of 38% v/s 39.9% last year. Can someone please show me who is generating 38% of gross profit margin? 

    There is one thing that I am beginning to agree with some of them - Apple does need to get into content. I do think that they are missing out on certain opportunities. 
    baconstangmdriftmeyerbadmonkcali
  • Reply 6 of 41
    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
    We are currently in Q1 2017 by Apple's fiscal year. 
    macseekerirelandcali
  • Reply 7 of 41
    sflocalsflocal Posts: 4,421member
    sog35 said:
    The only number that matters:

    revenue guidance for Q1-2017 - $76 billion to $78 billion

    looks like we are back to revenue/profit growth next quarter. Nice.

    We see $150 next year. 
    Or else what?  Make some empty promise that you'll break anyways?
    freshmakernolamacguy
  • Reply 8 of 41
    eightzeroeightzero Posts: 2,238member
    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
    Fiscal Q4.
  • Reply 9 of 41
    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
    Seriously?  Fiscal Q4.  Come on man.
    cali
  • Reply 10 of 41
    cropr said:
    "Our strong September quarter results cap a very successful fiscal 2016 for Apple," Apple Chief Executive Tim Cook said. "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."
    I think the important part here is what Tim did not say. I was expecting something like: "we're thrilled by the sales  uptake of iPhone7 and Apple Watch 2".  Maybe he is slightly disappointed by the figures.
    From the published earnings report:

    “Our strong September quarter results cap a very successful fiscal 2016 for Apple,” said Tim Cook, Apple’s CEO. “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.”

    magman1979irelandpscooter63tmaybadmonkcali
  • Reply 11 of 41
    China down 30% YOY. Ouch.
    dasanman69
  • Reply 12 of 41
    Funny you always know which media outlets will sit on the "iPhone sales keep falling" and "4Q Rev Misses".  Those being Forbes and Bloomberg.  Those two outlets ALWAYS post non stop negative stuff about Apple.  It's fine.  Investors will see right past this and look to guidance, which looks good.  This will back on an uptrend by Thursday.
    watto_cobrabadmonkcali
  • Reply 13 of 41

    4 Acquisitions during the quarter?

    Looked it up:



    https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple
    edited October 2016 baconstangpscooter63badmonk
  • Reply 14 of 41
    Rayz2016Rayz2016 Posts: 4,556member
    sog35 said:

    We see $150 next year. 
    No, we won't. 
  • Reply 15 of 41
    Rayz2016Rayz2016 Posts: 4,556member

    China down 30% YOY. Ouch.
    Service revenues up 24%. Yowzers. 
    baconstangwatto_cobracali
  • Reply 16 of 41
    Rayz2016 said:
    sog35 said:

    We see $150 next year. 
    No, we won't. 
    If iPhone 8 is as big of an upgrade as has been rumored or expected, yes we will.
    badmonkcali
  • Reply 17 of 41
    Tim sounds really lethargic on this call. On other calls he would give kind of lengthy, thoughtful answers. Today it's pretty much very short answers. For example he was asked about the future and if Apple knows where it wants to go and what it wants to do or if things are more up in the air. All Tim said is Apple has a pipeline of things it's working on but he can't comment on it. Basically a non-answer.  Listening to this call I don't sense a lot of excitement about the future. Tim sounds tired and defensive.
    edited October 2016 dasanman69badmonk
  • Reply 18 of 41
    lkrupplkrupp Posts: 6,682member
    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
    Because a “fiscal” quarter and a “calendar” quarter are not the same thing.
    dasanman69nolamacguy
  • Reply 19 of 41
    irelandireland Posts: 17,547member

    There is one thing that I am beginning to agree with some of them - Apple does need to get into content. I do think that they are missing out on certain opportunities. 
    I don't know about need, but if I were Tim I'd push for an Netflix acquisition. Apple TV and Apple would do well to own Netflix when it comes to new TV content and streaming. Like I've said already they could offer a Netflix discount on Apple TV and give Netflix more support for new content. This would put Apple TV on the map. And produce a decent first party gaming controller. Gaming and TV content are what the little box need. Netflix have a huge head-start on everyone here in terms of understanding new content, producing it and distributing it. You can't simply replicate that. Apple could help them make better apps and the circle would be complete. Netflix $9.99 per month—$6.99 on Apple TV. And installed by default on every Apple device. No matter the acquisition price they've recoup it over time. And at some juncture rename the service 'Apple TV' and bang an Apple logo at the start of each show they produce. Apple wouldn't just be in the content game, but at the top of it.
    edited October 2016 aderutterwatto_cobracali
  • Reply 20 of 41
    sflocalsflocal Posts: 4,421member

    Still trying to understand how Apple released numbers for 2016 Q4 income. We aren't half way thru...
    Apple's 4th Quarter ended September 24, 2016, that's why.  Apple is currently on their 1st-quarter 2017.

    Apple is not on a calendar quarter.
    edited October 2016
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