CUPERTINO, Calif.--(BUSINESS WIRE)--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.
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) |
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| Three Months Ended | Twelve Months Ended | ||||||||||||||
|
September 24, 2016 |
September 26, 2015 |
September 24, 2016 |
September 26, 2015 |
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| 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 | |||||||
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) |
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|
September 24, 2016 |
September 26, 2015 |
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| 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 | ||||
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) |
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| Twelve Months Ended | ||||||||
|
September 24, 2016 |
September 26, 2015 |
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| 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% | ||||||||||||||||
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(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. |