Upturn in sales against predictions for the quarter, but things still looking bad for Apple
Apple’s financial results for its fiscal 2016 third quarter ended 25 June 2016 were down year on year, once again, while being better than the company’s expectations for the quarter.
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 same quarter last year.
Last quarter, Apple stated it was predicting revenue of between $41 billion and $43 billion, with gross margin between 37.5% and 38%, for its fiscal 2016 third quarter, pointing to an upturn in sales.
Yet this quarter’s results are still significantly worse than the previous quarter’s, which marked its first revenue dip in 13 years. The company posted quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion, or $1.90 per diluted share, for the second quarter 2016. Again, these results compared badly to revenue of $58 billion and net income of $13.6 billion, or $2.33 per diluted share, in the second quarter last year.
However, the company is predicting its fourth quarter 2016 will slightly improve on this quarter’s results, on revenue between $45.5 billion and $47.5 billion.
Gross margin for the third quarter 2016 was 38% compared to 39.7% in the same quarter in 2015. International sales accounted for 63% 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.”
Said Luca Maestri, Apple’s CFO: “Our Services business grew 19% 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. 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 programme.”
Apple provided the following guidance for its fiscal 2016 fourth quarter: revenue between $45.5 billion and $47.5 billion; gross margin between 37.5% and 38%; operating expenses between $6.05 billion and $6.15 billion; other income/(expense) of $350 million; tax rate of 25.5%.