Services Revenue Grows 24% to All-Time Quarterly Record of
$6.3 Billion
Apple® today announced financial results for its fiscal 2016
fourth quarter ended September 24, 2016. The Company posted
quarterly revenue of $46.9 billion and quarterly net income of $9
billion, or $1.67 per diluted share. These results compare to
revenue of $51.5 billion and net income of $11.1 billion, or $1.96
per diluted share, in the year-ago quarter. 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.
“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.”
“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
Apple’s board of directors has declared a cash dividend of $0.57
per share of the Company’s common stock. The dividend is payable on
November 10, 2016 to shareholders of record as of the close of
business on November 7, 2016.
Apple will provide live streaming of its Q4 2016 financial
results conference call beginning at 2:00 p.m. PDT on October 25,
2016 at www.apple.com/investor/earnings-call/. This webcast will
also be available for replay for approximately two weeks
thereafter.
This press release contains forward-looking statements including
without limitation those about the Company’s estimated revenue,
gross margin, operating expenses, other income/(expense), and tax
rate. These statements involve risks and uncertainties, and actual
results may differ. Risks and uncertainties include without
limitation the effect of competitive and economic factors, and the
Company’s reaction to those factors, on consumer and business
buying decisions with respect to the Company’s products; continued
competitive pressures in the marketplace; the ability of the
Company to deliver to the marketplace and stimulate customer demand
for new programs, products, and technological innovations on a
timely basis; the effect that product introductions and
transitions, changes in product pricing or mix, and/or increases in
component costs could have on the Company’s gross margin; the
inventory risk associated with the Company’s need to order or
commit to order product components in advance of customer orders;
the continued availability on acceptable terms, or at all, of
certain components and services essential to the Company’s business
currently obtained by the Company from sole or limited sources; the
effect that the Company’s dependency on manufacturing and logistics
services provided by third parties may have on the quality,
quantity or cost of products manufactured or services rendered;
risks associated with the Company’s international operations; the
Company’s reliance on third-party intellectual property and digital
content; the potential impact of a finding that the Company has
infringed on the intellectual property rights of others; the
Company’s dependency on the performance of distributors, carriers
and other resellers of the Company’s products; the effect that
product and service quality problems could have on the Company’s
sales and operating profits; the continued service and availability
of key executives and employees; war, terrorism, public health
issues, natural disasters, and other circumstances that could
disrupt supply, delivery, or demand of products; and unfavorable
results of legal proceedings. More information on potential factors
that could affect the Company’s financial results is included from
time to time in the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of the Company’s public reports filed with the SEC, including the
Company’s Form 10-K for the fiscal year ended September 26, 2015,
its Form 10-Q for the fiscal quarter ended December 26, 2015, its
Form 10-Q for the fiscal quarter ended March 26, 2016, its Form
10-Q for the fiscal quarter ended June 25, 2016, and its Form 10-K
for the fiscal year ended September 24, 2016 to be filed with the
SEC. The Company assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
Apple revolutionized personal technology with the introduction
of the Macintosh in 1984. Today, Apple leads the world in
innovation with iPhone, iPad, Mac, Apple Watch and Apple TV.
Apple’s four software platforms — iOS, macOS, watchOS and tvOS —
provide seamless experiences across all Apple devices and empower
people with breakthrough services including the App Store, Apple
Music, Apple Pay and iCloud. Apple’s more than 100,000 employees
are dedicated to making the best products on earth, and to leaving
the world better than we found it.
NOTE TO EDITORS: For additional information visit Apple’s PR
website (www.apple.com/pr), or call Apple’s Media Helpline at (408)
974-2042.
© 2016 Apple Inc. All rights reserved. Apple and the Apple logo
are trademarks of Apple. Other company and product names may be
trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except number of shares
which are reflected in thousands and per share amounts)
Three Months Ended Twelve Months Ended
September 24, 2016 September 26,
2015 September 24, 2016 September
26, 2015 Net sales $ 46,852 $ 51,501 $ 215,639 $ 233,715
Cost of sales (1) 29,039 30,953 131,376
140,089 Gross margin 17,813 20,548 84,263
93,626 Operating expenses: Research and development (1)
2,570 2,220 10,045 8,067 Selling, general and administrative (1)
3,482 3,705 14,194 14,329 Total operating
expenses 6,052 5,925 24,239 22,396
Operating income 11,761 14,623 60,024 71,230 Other
income/(expense), net 427 439 1,348 1,285
Income before provision for income taxes 12,188 15,062 61,372
72,515 Provision for income taxes 3,174 3,938 15,685
19,121 Net income $ 9,014 $ 11,124 $ 45,687
$ 53,394 Earnings per share: Basic $ 1.68 $ 1.97 $
8.35 $ 9.28 Diluted $ 1.67 $ 1.96 $ 8.31 $ 9.22 Shares used
in computing earnings per share: Basic 5,366,912 5,646,916
5,470,820 5,753,421 Diluted 5,393,333 5,682,519 5,500,281 5,793,069
Cash dividends declared per share $ 0.57 $ 0.52 $ 2.18 $
1.98 (1) Includes share-based compensation expense as
follows: Cost of sales $ 186 $ 145 $ 769 $ 575 Research and
development $ 476 $ 390 $ 1,889 $ 1,536 Selling, general and
administrative $ 368 $ 380 $ 1,552 $ 1,475
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(In millions, except number of shares
which are reflected in thousands and par value)
September 24, 2016 September 26,
2015 ASSETS: Current assets: Cash and cash equivalents $
20,484 $ 21,120 Short-term marketable securities 46,671 20,481
Accounts receivable, less allowances of $53 and $63, respectively
15,754 16,849 Inventories 2,132 2,349 Vendor non-trade receivables
13,545 13,494 Other current assets 8,283 15,085 Total
current assets 106,869 89,378 Long-term marketable
securities 170,430 164,065 Property, plant and equipment, net
27,010 22,471 Goodwill 5,414 5,116 Acquired intangible assets, net
3,206 3,893 Other non-current assets 8,757 5,422
Total assets $ 321,686 $ 290,345 LIABILITIES
AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable $
37,294 $ 35,490 Accrued expenses 22,027 25,181 Deferred revenue
8,080 8,940 Commercial paper 8,105 8,499 Current portion of
long-term debt 3,500 2,500 Total current liabilities
79,006 80,610 Deferred revenue, non-current 2,930 3,624
Long-term debt 75,427 53,329 Other non-current liabilities 36,074
33,427 Total liabilities 193,437 170,990
Commitments and contingencies Shareholders’
equity: Common stock and additional paid-in capital, $0.00001 par
value: 12,600,000 shares authorized; 5,336,166 and 5,578,753 shares
issued and outstanding, respectively 31,251 27,416 Retained
earnings 96,364 92,284 Accumulated other comprehensive
income/(loss) 634 (345 ) Total shareholders’ equity 128,249
119,355 Total liabilities and shareholders’ equity $
321,686 $ 290,345
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Twelve Months Ended September 24, 2016
September 26, 2015 Cash and cash equivalents,
beginning of the period $ 21,120 $ 13,844
Operating activities: Net income 45,687 53,394 Adjustments to
reconcile net income to cash generated by operating activities:
Depreciation and amortization 10,505 11,257 Share-based
compensation expense 4,210 3,586 Deferred income tax expense 4,938
1,382 Changes in operating assets and liabilities: Accounts
receivable, net 1,095 611 Inventories 217 (238 ) Vendor non-trade
receivables (51 ) (3,735 ) Other current and non-current assets
1,090 (179 ) Accounts payable 1,791 5,400 Deferred revenue (1,554 )
1,042 Other current and non-current liabilities (2,104 ) 8,746
Cash generated by operating activities 65,824 81,266
Investing activities: Purchases of marketable
securities (142,428 ) (166,402 ) Proceeds from maturities of
marketable securities 21,258 14,538 Proceeds from sales of
marketable securities 90,536 107,447 Payments made in connection
with business acquisitions, net (297 ) (343 ) Payments for
acquisition of property, plant and equipment (12,734 ) (11,247 )
Payments for acquisition of intangible assets (814 ) (241 )
Payments for strategic investments (1,388 ) — Other (110 ) (26 )
Cash used in investing activities (45,977 ) (56,274 )
Financing activities: Proceeds from issuance of common stock 495
543 Excess tax benefits from equity awards 407 749 Payments for
taxes related to net share settlement of equity awards (1,570 )
(1,499 ) Payments for dividends and dividend equivalents (12,150 )
(11,561 ) Repurchases of common stock (29,722 ) (35,253 ) Proceeds
from issuance of term debt, net 24,954 27,114 Repayments of term
debt (2,500 ) — Change in commercial paper, net (397 ) 2,191
Cash used in financing activities (20,483 ) (17,716 )
Increase/(Decrease) in cash and cash equivalents (636 ) 7,276
Cash and cash equivalents, end of the period $ 20,484
$ 21,120 Supplemental cash flow disclosure: Cash paid
for income taxes, net $ 10,444 $ 13,252 Cash paid for interest $
1,316 $ 514
Apple Inc. Q4 2016 Unaudited Summary
Data (Units in thousands, Revenue in millions)
Q4 2016 Q3 2016 Q4 2015
Sequential Change Year/Year Change
Operating Segments Revenue
Revenue Revenue
Revenue Revenue Americas
$20,229 $17,963 $21,773 13% - 7% Europe 10,842 9,643 10,577 12% 3%
Greater China 8,785 8,848 12,518 - 1% - 30% Japan 4,324 3,529 3,929
23% 10% Rest of Asia Pacific 2,672 2,375 2,704 13% - 1%
Total
Apple $46,852 $42,358
$51,501 11% - 9%
Q4 2016 Q3 2016 Q4 2015 Sequential
Change Year/Year Change Product Summary
Units Revenue
Units Revenue
Units Revenue
Units Revenue
Units Revenue iPhone (1)
45,513 $28,160 40,399 $24,048 48,046 $32,209 13% 17% - 5% - 13%
iPad (1) 9,267 4,255 9,950 4,876 9,883 4,276 - 7% - 13% - 6% 0% Mac
(1) 4,886 5,739 4,252 5,239 5,709 6,882 15% 10% - 14% - 17%
Services (2) 6,325 5,976 5,086 6% 24% Other Products (1)(3) 2,373
2,219 3,048 7% - 22%
Total Apple
$46,852 $42,358 $51,501 11% - 9%
(1)
Includes deferrals and amortization of
related software upgrade rights and non-software services.
(2)
Includes revenue from Internet Services,
AppleCare, Apple Pay, licensing and other services.
(3)
Includes sales of Apple TV, Apple Watch,
Beats products, iPod and Apple-branded and third-party
accessories.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161025006677/en/
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comJoan Hoover,
408-974-4570hoover1@apple.com
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