Apple Sees Earnings, Stock Drop


Apple headquarters in Cupertino.
Apple headquarters in Cupertino.

CUPERTINO — Apple announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. The Cupertino giant posted quarterly revenue of $46.9 billion, down 9% from a year ago, and quarterly net income of $9 billion.  Gross margin was 38 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

Shares in the company were down nearly 4% in Wednesday trading.

“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.”

Sales in all Apple product lines dropped from the previous year. iPhone sales, the leading revenue generator for the company, declined 5% in units with 45.5 million sold in the quarter. iPad sales were 9.26 million in the quarter, down 6% in the quarter. The company’s Mac lineup of notebooks and desktops took the biggest hit, selling 4.88 million units, a drop of 14% from last year.

Sales of other products — which the company includes Apple Watch, Apple TV, Beats and Apple-branded accessories — were down 22% in revenue from 2015.

Sales in China also declined 30% from last year and were down 7% overall in North and South America.

“We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter,” said Luca Maestri, Apple’s CFO. “We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program.”

Apple is providing the following guidance for its fiscal 2017 first quarter:

  • 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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