The mobile phone giant Apple Inc. (NASDAQ:AAPL) released financial results for the first quarter of FY2016, posting a record revenue of US$75.9 billion.
Apple recorded a 2% rise in its overall revenue compared to the December quarter in 2014. The revenue increased 47% compared to the Q4 2015. The company announced a record net income of $18.4 billion, compared to US$18 billion in the previous year. The company sold 74.77 million iPhones in the quarter ended December 2015, which is a modest increase from 74.5 million units which were sold in the December 2014 quarter. Apple’s installed base drove almost US$9 billion in the quarter, which is up 24% when compared year-on-year.
Apple’s CEO, Tim Cook, commented on the results: “Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV. The growth of our services accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices.”
Adding to this, Apple’s CFO, Luca Maestri also underlined that the company generated US$27.5 billion in operating cash flow during the current quarter. More than $9 billion dollars were spent in share repurchases and dividends. “We have now completed US$153 billion of our US$200 billion capital return program.”
Apple however provided a gloomy guidance for its Q216. It expects the revenue to fall between the range of US$50 billion and US$53 billion. The company also anticipates its margins to decrease. The company mentioned that its profitability was undermined by the slow growth in China and the strong US dollar, given that international sales accounted for 66% of the company’s revenue in the current quarter. According to Apple, the value of revenue worth US$100 earned through non-US operations in Q4 of FY14, is now worth only US$85.
AAPL has a market cap of US$555 Billion or A$790 billion, compared to Commonwealth Bank’s market cap of A$140 billion. AAPL closed at US$99.44 on 26 January 2016, and has slumped 30% from its peak in April 2015. As at 3:55 PM (AEDT), the stock has declined more than 2.57% in its after-hours trade.
Wise-Owl’s Analyst, Simon Herrmann, commented on Apple’s performance: “The stock is edging lower in the after-session trade subsequent to the result announcement. However, we have to wait and see how it performs once the market resumes trading. The main catalyst will be the company’s ability to drive sales growth from the upcoming iPhone 7. The big question is whether Apple can lift its growth trajectory or if the investors will have to be satisfied that the company has reached its maturity.”
Author: Imran Valibhoy
Jan 27, 2016
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.