If you have stock in Apple, take a sigh of relief. Yesterday afternoon the company announced record quarterly profit, netting $18.4 billion dollars in Q1 2016. “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,” said Tim Cook, Apple’s CEO. The quarter, which ended December 26, 2015, saw record breaking revenue as well, raking in $75.9 billion dollars. Wall Street warned Apple’s soaring numbers couldn’t last, but the company continues its upward climb.. for now.
Apple’s Q1 results put emphasis on the fact that Apple is more and more becoming a global company, with 66% of its Q1 sales being International and revenue up %14 in China alone. Overall, the company’s revenue is up 2% from Q1 2015 results, with record sales of iPhones having sold 74.8 million units, up only 1% from the same quarter last year. Meanwhile, Apple sold 16.1 million units of the iPad, down 25% from Q1 2015. Apple also failed to mention how many Apple Watch units it sold, stating only that it sold the most units to-date in Q1 with especially high sales in December. However, Apple saw the greatest number of switches from Android to iOS ever in Q1 2016.
“Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment,” said Luca Maestri, Apple’s CFO. “We generated operating cash flow of $27.5 billion during the quarter, and returned over $9 billion to investors through share repurchases and dividends. We have now completed $153 billion of our $200 billion capital return program.” Apple also has $216 billion in cash and reached a milestone of one billion active devices.
While revenue is up year-over-year for Q1 2016, Apple expects to see its first decline in Q2 with sales picking back up later in the year with the release of the iPhone 7. Apple expects the following criteria for its Q2 earnings in 2016:
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revenue between $50 billion and $53 billion
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gross margin between 39 percent and 39.5 percent
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operating expenses between $6 billion and $6.1 billion
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other income/(expense) of $325 million
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tax rate of 25.5 percent
Apple’s board of directors has also announced a cash dividend of $.52 per share of the Company’s common stock. The dividend is payable on February 11, 2016, to shareholders of record as of the close of business on February 8, 2016.
