On July 27, Apple reported their fiscal 2016 third quarter results. They company had a quarterly revenue of $42.4 billion, which was down 15 percent year-over-year. But despite that, the good news was that this number still beat financial analyst consensus estimates. Apple’s revenue last year was at $49.6 billion.
Apple’s gross margin was also down year-over-year, partially because of the apparent popularity of the lower-cost iPhone SE> The highlights were:
- Services revenue grew 19 percent to roughly $6 billion
- iPad sales beat expectations (9.95 million units vs. 9.1 million)
Here are the device numbers:
- iPhone: 40.4 million units — $24 billion
- iPad: 9.95 million units — $4.9 billion
- Mac: 4.2 million units — $5.2 billion
- Services (App Store, etc.) — $6 billion
- Other Products (including Apple TV, Apple Watch) — $2.2 billion
Over 60 percent of the company’s sales were from international markets. One of the big concerns was China, whose sales were off 33 percent versus a year ago. Last week, IDC asserted that Apple watch sales saw a significant 55 percent plunge from the year before.
Apple’s FY Q4 guidance (which was between $45.5 billion and $47.5 billion) that was better (somewhat) than analyst expectations. The company reported they had $231.5 billion in cash on hand.
Tim Cook, Apple’s CEO, said during the earnings call, that the quarter had seen “millions” of new iPhone buyers, and it’s believed that some of that was attributed to the iPhone SE. The demand for the phone was apparently exceeded supply.
Cook’s reasoning behind China’s results appear to be bad, but the business is healthier than it seems there, given the economic downturn. He said that India is also a fast-growing market for Apple.