iPhone leads Apple to record 2Q15 results


Strong performance of iPhone, Mac and App Store drives 27% revenue growth and 40% EPS growth, setting new second quarter records

Apple has announced record financial results for its fiscal 2015 second quarter ended 28 March 2015, driven by strong demand in China by the country’s growing middle class.

The company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. These results compare to revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share, in the same quarter last year. Gross margin was 40.8% compared to 39.3% in the same period 2014. International sales accounted for 69% of the quarter’s revenue.

Apple stated the growth was fuelled by record second quarter sales of iPhone and Mac and all-time record performance of the App Store.

Growth was led by China, where iPhone sales rocketed by 72% against the same period last year, beating US sales of the smartphones. Chinese revenues overall in the quarter grew by 71% on the same quarter 2014, to $16.8 billion. This meant China became Apple’s second largest market, overtaking Europe.

Commented Tim Cook, Apple’s CEO: “We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever. We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

Added Luca Maestri, Apple’s CFO: “The tremendous customer demand for our products and services in the March quarter drove revenue growth of 27 percent and EPS growth of 40%. Cash flow from operations was also outstanding at $19.1 billion.”

For its fiscal 2015 third quarter, Apple is providing the following guidance: revenue between $46 billion and $48 billion; gross margin between 38.5% and 39.5%; operating expenses between $5.65 billion and $5.75 billion; other income (expenses) of $350 million; tax rate of 26.3%.

According to Danielle Levitas, App Annie’s SVP of research and analysis, Apple’s continued success indicates the mobile app market is still burgeoning: “Developers will welcome the news that Apple continues to perform well with strong global expansion of iOS via the incredible sales for the iPhone 6 and 6 Plus products in particular. Add to this that starting this quarter, developers have a new platform to expand into – the Apple Watch – and together we see this as a sure fire sign that the app economy is still nascent and poised for more incredible growth.

“These results reinforce the expanding opportunity for developers and their increasing potential to reap significant financial rewards from the growing iOS user and device installed base,” added Levitas. “Although Google Play’s worldwide downloads in the first quarter 2015 were approximately 70% higher than the iOS App Store, according to our data, the iOS App Store’s worldwide revenue in the same period was about 70% higher than on Google Play, demonstrating that iOS developers continue to monetise their apps more effectively.”

Apple also announced that thanks to its second quarter success, it has authorised an increase of more than 50% to the company’s programme to return capital to shareholders. Under the expanded programme, Apple plans to utilise a cumulative total of $200 billion of cash by the end of March 2017. As part of the revised programme, the Board has increased its share repurchase authorisation to $140 billion from the $90 billion level announced last year.


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