Apple CEO Tim Cook (Click Image To Enlarge)
This afternoon Apple delivered a solid earnings report, with just about everything in its right place.
For the September quarter (FY Q4 2015), it earned $1.96 per share, on $51.5 billion in revenue. Its earnings were well ahead of expectations, while revenue was roughly in line.
Apple sold 48.05 million iPhones, which is a 22% jump compared to the previous year, and is about what analysts expected.
Investors basically yawned at the results, with the stock going nowhere in after-hours trading.
Apple offered holiday guidance that is a little light of expectations, but is generally fine. If Apple hits the high-end of its guidance, $77.5 billion, it would deliver 4% growth, which is reassuring to investors who were worried Apple's growth would go negative.
Apple analyst Gene Munster wrote in a note shortly after the numbers were released.
"Our early take is that the guidance seems to imply flattish (74-76 million) iPhones for December. This would imply iPhone units down 1% to up 2% year-over-year. We view this as a relief given investors were bracing for the start of the 6S cycle to be down meaningfully (down 5-8% y/y)."
Here are all the numbers versus expectations:
- Revenue: $51.5 billion, up 22% year-over-year (y/y), versus expectations of $51.04 billion
- EPS: $1.96, up 38% y/y, versus expectations of $1.88
- Net income: $11.1 billion
- iPhone units: 48.05 million, up 22% y/y, versus expectations of 48.5 million
- iPhone's average selling price: $670
- iPad units: 9.88 million versus, down 20% y/y, expectations of 10.2 million
- iPad's average selling price: $432.66
- Mac units: 5.71 million, up 4% y/y, versus expectations of 5.6 million
- Gross margin: 39.9% versus expectations of 39.3%
- Cash on hand: $206 billion
- December quarter revenue: $75.5-$77.5 versus expectations of $77.13 billion. If Apple hits the top end of its guidance, revenue will be up 4% y/y.
Here's a table with all the results:
Revenues by Geographic Segment and Product Summary
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Charts
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Earnings Call Log
You may also view the Apple Q3 2015 Live Earnings Call Log by clicking HERE
COMMENTARY: Cook said the company began taking orders on Monday for the new Apple TV. He called it a “huge day” based on demand for the new product.
Apple also issued a healthy forecast for the holiday quarter, which began this month. These are the highlights:
- revenue between $75.5 billion and $77.5 billion
- gross margin between 39 percent and 40 percent
- operating expenses between $6.3 billion and $6.4 billion
- other income/(expense) of $400 million
- tax rate of 26.2 percent
But analysts appeared to be concerned with Apple’s ability to continue growing strongly into 2016.
The company has not yet broken out numbers for Apple Watch sales but Cook said sales are ahead of Apple’s expectations.
I feel that investors and analysts were short-changed and left with a blank stare when it came to sales of the Apple Watch. For two consecutive quarters, Tim Cook has declined to provide data on actual Apple Watch sales. Cook stated that the lack of information about the Apple Watch is for "competitive reasons." Translation: He doesn't want to feel embarassed if Apple Watch sales are poor or below expectations.
Its my belief that Apple Watch sales are okay, but not spectacular, and he wants to wait until after Christmas to give the Apple Watch a boost in sales because consumers are likely to buy the watch as a gift. This period also gives existing Apple Watch owners and new buyers time to report any bugs or issues with the new Apple Watch OS 2.0.1 update which just became available for downloading on Monday. The new OS update improves batery life and security measures and offers bug fixes and new emoji's.
Apple's Q3 2015 (Fiscal 4th quarter) unaudited financial reports can found in its press release by clicking HERE.
Courtesy of an article dated October 27, 2015 appearing in Business Insider, an article dated October 27, 2015 appearing in Forbes. and an article dated October 27, 2015 appearing in Forbes Tech
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