Apple falls just shy of expectations with $52.9B in revenue, iPhone sales dip again to 50....

Posted:
in AAPL Investors edited May 2017
Apple on Tuesday revealed the results of its second quarter of fiscal year 2017, earning $52.9 billion in revenue and posting year-over-year growth, but once again saw iPhone sales shrink from the same period a year ago.




Apple shipped 50.8 million iPhones in the March quarter, which was down from the 51.2 million the company shipped in the second quarter of fiscal 2016. That means the iPhone's return to growth under the iPhone 7 series was short-lived, lasting just the holiday 2016 quarter.

Still, there were bright spots in Apple's results, including slightly higher-than-expected profits that resulted in earnings per share of $2.10. In general, Wall Street was expecting $53.1 billion in sales and $2.02 earnings per share.

Though iPhone units were down just shy of 1 percent, revenue was actually up slightly, reflecting higher sales of the premium-priced iPhone 7 Plus. And its Services business (revenue up 18 percent year over year) and "Other Products" category -- including the Apple Watch, AirPods and Beats hardware (up 31 percent) -- were bright spots for the company.

Rounding out the rest of Apple's major hardware categories, iPad sales were 8.9 million units, another year-over-year decline, while the Mac sold 4.2 million, up from 4 million a year ago. Mac sales price increases also outpaced sales growth, with revenue growing 14 percent year over year.




"We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus," said Apple Chief Executive Tim Cook. "We've seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we're thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference next month in San Jose."

Apple also announced that its board of directors has authorized an increase of $50 billion to the company's program to return capital to shareholders. It is also extending the program timeframe by four quarters. Under the newly expanded program, Apple plans to spend a cumulative total of $300 billion by the end of March 2019.

Accordingly, Apple's board increased its share repurchase authorization to $210 billion from the $175 billion level announced a year ago. The company also expects to continue to net-share-settle vesting restricted stock units.

The dividend will increase by 10.5 percent to $0.63 per share, payable on May 18, 2017 to shareholders of record as of the close of business on May 15.

Apple has returned over $211 billion to shareholders, including $151 billion in share repurchases.

"We generated strong operating cash flow of $12.5 billion and returned over $10 billion to our investors in the March quarter," said Apple Chief Financial Officer Luca Maestri. "Given the strength of our business and our confidence in our future, we are happy to announce another $50 billion increase to our capital return program today."

Looking forward to the next quarter, Apple's third of fiscal 2017, the company is guiding the following:
  • revenue between $43.5 billion and $45.5 billion
  • gross margin between 37.5 percent and 38.5 percent
  • operating expenses between $6.6 billion and $6.7 billion
  • other income/(expense) of $450 million
  • tax rate of 25.5 percent
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Comments

  • Reply 1 of 46
    maestro64maestro64 Posts: 4,101member
    Lets not forget $0.63 dividend, here comes another big dividend check
    watto_cobra
  • Reply 2 of 46
    irelandireland Posts: 17,137member
    I figured Apple would sell more considering the base model iPhone 7 retails for a messily €779 ($852) after tax in my country. And iPhone 7 plus starts at a peasant-like €919 ($1,004)—practically an impulse buy.
    edited May 2017 elijahgadm1
  • Reply 3 of 46
    eightzeroeightzero Posts: 1,998member
    SuperCycle here we come...
    calijahbladepscooter63watto_cobra
  • Reply 4 of 46
    mike1mike1 Posts: 1,649member
    So, isn't this what everybody wants? Increase in revenue and EPS with less reliance (albeit slight) on iPhone?
    Solibaconstangrandominternetpersonpscooter63watto_cobra
  • Reply 5 of 46
    chasmchasm Posts: 585member
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent). This totally bucks the overall PC trend.
    Solicalibaconstangelijahgradarthekatwatto_cobra
  • Reply 6 of 46
    irelandireland Posts: 17,137member
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    edited May 2017
  • Reply 7 of 46
    SoliSoli Posts: 7,360member
    mike1 said:
    So, isn't this what everybody wants? Increase in revenue and EPS with less reliance (albeit slight) on iPhone?
    Sounds like great news for those that claim Apple can only survive because of the iPhone, which will sound be obsolete because of Android.
  • Reply 8 of 46
    SoliSoli Posts: 7,360member
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    Sarcasm?
    edited May 2017 cali
  • Reply 9 of 46
    bageljoeybageljoey Posts: 1,726member
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.

    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    Well, I bought 2...

    ;)
    watto_cobra
  • Reply 10 of 46
    k2kwk2kw Posts: 1,249member
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    People buying the 2015 MBP
    baconstang
  • Reply 11 of 46
    rogifan_newrogifan_new Posts: 2,841member
    Cook told CNBC that iPhone rumors delayed iPhone purchases in the quarter. So is that going to apply to the next two quarters as well?
  • Reply 12 of 46
    calicali Posts: 3,495member
    Pretty sure the Other category is being pushed mostly by Watch.

    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.

    Touch bar MacBook Pro obviously.

    mike1 said:
    So, isn't this what everybody wants? Increase in revenue and EPS with less reliance (albeit slight) on iPhone?
    No they want iPhone to sell 80 million a quarter and everything else to sell 100 million a quarter. It's ridiculous jibber jabber.
    StrangeDaysbaconstangwatto_cobra
  • Reply 13 of 46
    irelandireland Posts: 17,137member
    Soli said:
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    Sarcasm?
    How'd ya guess?
  • Reply 14 of 46
    irelandireland Posts: 17,137member
    Cook told CNBC that iPhone rumors delayed iPhone purchases in the quarter. So is that going to apply to the next two quarters as well?
    Steve said the iPhone would come down in price over time but in reality it keeps going up in price yearly.
  • Reply 15 of 46
    fallenjtfallenjt Posts: 3,833member
    And stock price after hour?
    flaneur
  • Reply 16 of 46
    SoliSoli Posts: 7,360member
    ireland said:
    Cook told CNBC that iPhone rumors delayed iPhone purchases in the quarter. So is that going to apply to the next two quarters as well?
    Steve said the iPhone would come down in price over time but in reality it keeps going up in price yearly.
    1) Not that I don't believe you, since that's the trend with any specific CE component over a certain duration from launch, but I personally don't recall that statement so I'd like to see a source.

    2) The previous year's model does go down in price, and lateral move, budget devices with some new and some old tech are reduced in price because the overall component costs are lower, but we need to consider that R&D is at an all time high (not that it's necessary increased with the iPhone) and Apple has moved the bar for making considerably better devices year-over year. How much does the water resistance add, or the altimeter, or the better radios, and much improved SoC that continue to do a lot more processing with less power that the competition still can't touch years later? Then you have the better color gamut and countless other improvements to the iPhone.

    My guess is that Apple just updated just some very basic internal components that look good on a spec sheet that they could be able to lower the price and still keep the same profit margins, but they're still pushing the envelope so I don't see that happening. Touch ID, Apple Pay, and 3D Touch would've taken years to work out the HW, SW, and applicable developer tools properly.

    Even the Touch Bar on the MBP is said to have taken nearly a decade to work out, which I can believe since those Macs now run dual OS X operations systems—the primary macOS and then a forked version of watchOS running on the T1-chip they built specifically so they could have the Touch Bar with Touch ID and Apple Pay. I suspect the next MBP will drop in price now that the R&D fort he Touch Bar is likely paid for and because the rest of the machine gets "updated" minimally compared to how the iPhone gets updated YoY.
    StrangeDayswatto_cobra
  • Reply 17 of 46
    macxpressmacxpress Posts: 4,364member
    k2kw said:
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    People buying the 2015 MBP
    I think you meant the 2016 MBP...you might think its junk but obviously thats not the case for the majority of Apple's customer base. 
    Soliwatto_cobrapulseimages
  • Reply 18 of 46
    StrangeDaysStrangeDays Posts: 4,785member
    k2kw said:
    ireland said:
    chasm said:
    Best news from my perspective: Mac sales up to 4.2 million (200,000 more than last year, with revenue up 14 percent).
    I wonder why.
    People buying the 2015 MBP
    Nope. There's no way the 2015 model is leading record growth for Mac sales. That's just the techie-blogger-echo-chamber-whiner narrative, put forth by the usuals such as Marco Arment. As usual, his ultra-niche wants do no represent the mass market of consumers and pro consumers. The echo chamber is out of touch.
    Solibrucemcpscooter63watto_cobrapulseimages
  • Reply 19 of 46
    shahhet2shahhet2 Posts: 127member
    Nope. There's no way the 2015 model is leading record growth for Mac sales. That's just the techie-blogger-echo-chamber-whiner narrative, put forth by the usuals such as Marco Arment. As usual, his ultra-niche wants do no represent the mass market of consumers and pro consumers. The echo chamber is out of touch.
    Not sure, why few keep referring as record growth?
    It's 4% growth year over year.
    Overall PC Shipment also grew for very first time in 5 years (albeit 0.6%)
    HP grew 13% YoY, Dell grew 6.2% YoY.
    btw, IDC was right at the mark when one month ago they said Mac will sell 4.2M for this quarter.
    https://www.idc.com/getdoc.jsp?containerId=prUS42464617
    edited May 2017 palomine
  • Reply 20 of 46
    StrangeDaysStrangeDays Posts: 4,785member
    shahhet2 said:
    Nope. There's no way the 2015 model is leading record growth for Mac sales. That's just the techie-blogger-echo-chamber-whiner narrative, put forth by the usuals such as Marco Arment. As usual, his ultra-niche wants do no represent the mass market of consumers and pro consumers. The echo chamber is out of touch.
    Not sure, why few keep referring as record growth?
    It's 4% growth year over year.
    I refer to it as record growth because of last quarter's record mac sales. Perhaps "record sales" is more accurate than "record growth", but at that point we're splitting hairs -- the Mac is selling more than it ever has. Despite the whiners saying the MBP sucks because ports, because RAM, etc... Clearly people are voting w/ their wallets and buying Macs.
    edited May 2017 randominternetpersonwatto_cobra
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