Apple Reports First Year-Over-Year Revenue Decline Since 2003: $10.5B Profit on $50.6B in Revenue

[MacRumors]

Apple today announced financial results for the second fiscal quarter (first calendar quarter) of 2016. For the quarter, Apple posted revenue of $50.6 billion and net quarterly profit of $10.5 billion, or $1.90 per diluted share, compared to revenue of $58 billion and net quarterly profit of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter. As expected, the year-over-year decline in quarterly revenue was the first for Apple since 2003.

Gross margin for the quarter was 39.4 percent compared to 40.8 percent in the year-ago quarter, with international sales accounting for 67 percent of revenue. Apple also declared an increased quarterly dividend payment of $0.57 per share, up from $0.52. The dividend is payable on May 12 to shareholders of record as of May 9. The company currently holds $233 billion in cash and marketable securities, partially offset by $77 billion in long-term debt.

In addition to the increase in the dividend payment, Apple says it will once again expand its share repurchase authorization by an additional $35 billion to $175 billion and the company says it expects to spend over $250 billion in cash under its capital return program by the end of March 2018.

Apple sold 51.1 million iPhones during the quarter, down from 61.2 million a year earlier, while Mac sales were 4.03 million units, down from from 4.56 million units in the year-ago quarter. iPad sales were also down once again, falling to 10.25 million from 12.6 million.

"Our team executed extremely well in the face of strong macroeconomic headwinds," said Tim Cook, Apple's CEO. "We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices."

Apple's guidance for the third quarter of fiscal 2016 includes expected revenue of $41-43 billion and gross margin between 37.5 and 38 percent.

Apple will provide live streaming of its fiscal Q2 2016 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Conference Call and Q&A Highlights are available in reverse chronological order after the jump.

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Article Link: Apple Reports First Year-Over-Year Revenue Decline Since 2003: $10.5B Profit on $50.6B in Revenue

 

[KPOM]

Major miss, particularly on the upcoming quarter. 2016 is shaping up as an awful year for Apple. Kuo may have been right. Hopefully they can right the ship in 2017.

 

[farewelwilliams]

so...apple is doomed is finally appropriate here.

 

[CFreymarc]

Let the Apple-hater feeding frenzy begin!

 

[Dr.Chroma]

Oh Great. I bet hurry home and Sell My Apple Stock. I knew this day would come.

 

[Starfyre]

Apple, if you were holding back on any innovative new features, iPhone 7 is the time, don't wait for iPhone 7S for that curved OLED screen...

I recall there was mention that Steve Jobs had charted the way for future iPhones... did the roadmap just go up to iPhone 6?

I wouldn't blame this on market saturation. Samsung has a great strategy, they are pulling out a lot of stops to get their sales up. I expect Apple having the ability to do the same. May this be a wakeup call.

I don't want to pick up the next Samsung Galaxy phone if the iPhone 7 ends up being a drop in the bucket. A touch home button, and camera enhancements without OIS exclusive to a bigger plus version, won't cut it for me.

Not that 10.5B is anything low, though for a company like Apple, who has done what was considered impossible... maintaining growing numbers since the launch of a product 13 years ago... this should come as a surprise.

 

[BarmyGnome]

That's the way the cookie crumbles.

 

[BlueMoon63]

Cue the sky is falling posts. Only made $10bb in profits for 3 months. They are doomed.

 

[DonRivella]

That's still a cr*pload of profit.

 

[Brad9893]

so...apple is doomed is finally appropriate here.

How can you say $50 billion is doomed? But they certainly aren't doing as well as they used to. I'm not surprised.

 

[djpuma]

maybe this will mean apple will finally update macbook airs, pros and the mac mini.

 

[aamoren3]

It was fun while it lasted.


/sj

 

[Crosscreek]

Steve Jobs syndrome. The magic is gone.

 

[FSMBP]

For everyone who constantly discredits Steve Jobs contributions, the man did do something at Apple. He didn't write code/source parts from vendors etc, but he gave direction as he knew what to work on. Tim Cook isn't the same visionary; the numbers show this. Apple needs to **focus** on building fewer products and making them the best.

 

[jjm3]

WOW! Only 10.5 Billion-with-a-B dollars of pure profit... In what possible bizarro-world is that bad news?

 

[MNJohn]

Oh Great. I bet hurry home and Sell My Apple Stock. I knew this day would come.

Should have sold it last year....

 

[MacDarcy]

Only 50.8 billion?! What losers! Lol

 

[falainber]

I am surprised that they did not pre-announce this miss. They should have known about it for a while (judging by the size of the miss).

 

[zubikov]

Reality setting in. Too large of market cap for growth, saturated phone/tablet market, new products failed to match success of previous launches, no promising news in sight.

I don't see it as a failure, but rather a company that did the impossible over and over, finally coming back down to earth. It's sad but we all knew it would happen one day.

 

[garirry]

I'm praying that this is what will fix Apple. If not, then we'll just have to wait a few more years. You can milk money as much as you want, if what you're doing is not good enough, you'll still lose.

 

[polterbyte]

Doom! Gloom! Aaaaaaaahhhhhhhhhhh!!!!!!!

 

[rdlink]

maybe this will mean apple will finally update macbook airs, pros and the mac mini.

Yes, I'm sure that's what it means. I'll bet you Cook has called all of his department heads and told them to start informing everyone they have to work overtime this weekend until they're out the door. Look for them to start shipping on Monday.

 

[KPOM]

iPhone unit sales actually "beat," but the ARPU fell so revenue was a major miss. Now the iPhone SE's pricing makes lots of sense.

Mac sales were down to 4.03 million ($5.1 billion), and iPad was down to 10.25 million units at $4.41 billion. That, plus the resale value of the 12.9" iPad Pro lead me to believe the big iPad isn't selling well (but hopefully the new 9.7" iPad Pro will sell well).

 

[navaira]

Other is back to 4%. That's the most interesting bit for me. Obviously Watch hasn't made a huge difference.

 

[macrumorsuser10]

Just make bigger and bigger iPhones. The reason why their profits dropped is because they didn't have a 6.5 inch iPhone. Everyone loves 6.5 inches.

 

[Poochi]

Finally. This is what Apple gets for holding back innovation and features and nickle and diming consumers with incremental upgrades and bare minimum specs.

 

[djpuma]

Yes, I'm sure that's what it means. I'll bet you Cook has called all of his department heads and told them to start informing everyone they have to work overtime this weekend until they're out the door. Look for them to start shipping on Monday.

Sweet,
I know I could count on Cook.