Shares down?! But, but, but ... Apple just made $50bn – that's the way the Cookie grumbles

Macroeconomic headwinds blamed for disaster quarter

Apple has confirmed analysts' fears of a drab quarter, reporting its first year-over-year sales decline in more than a decade. Its share price is down 8.2 per cent to $95.76 in after-hours trading – dipping below the magic hundred-buck mark.

The Mac maker said that in the three months to March 31 – the second quarter of its fiscal year – revenue, income and earnings per share were all down and that all three of its hardware units – iPhone, Mac and iPad – saw a decline in year-over-year sales.

  • Revenues of $50.6bn represented a 13 per cent decline over Q2 2015's total of $58bn.
  • Net income of $10.5bn was down 26 per cent from $13.6bn a year ago.
  • Earnings per share of $1.90 fell short of the $2.00 mark analysts had set for the company.
  • iPhone shipments of 51.2 million units were down 16 per cent on the year and $32.9bn in revenues represents an 18 per cent drop over the year-ago quarter. CEO Tim Cook noted that the upgrade rates for the iPhone 6S were lower than those of last year's iPhone 6, though switches from Android were up.
  • iPad shipments hit 10.3 million units and $4.4bn, both down 19 per cent from Q2 2015.
  • Mac shipments of 4 million units and $5bn represented a 9 per cent drop in revenue and a 12 per cent drop in shipments.
  • Services revenues of $6bn were a 20 per cent gain on the quarter. Apple credited this in part to patent royalties and a 35 per cent jump in App Store revenues.
  • Other products revenue of $2.2bn was a 30 per cent increase from last year's $1.7bn haul. CEO Tim Cook would not release sales figures for the Apple Watch, only to say that sales of the smartwatch "met expectations."
  • Regional revenues declined in nearly every region, with the Americas dropping 10 per cent, Europe down 5 per cent, greater China down 26 per cent and the rest of Asia Pacific down 25 per cent. The only regional gain was in Japan, where revenues were up 24 per cent.

Cook put a brave face on the quarter, describing the revenue dip as a "pause in growth" for the maker of iStuffs.

"Our team executed extremely well in the face of strong macroeconomic headwinds," Cook said.

"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."

Cook noted that Apple will be showcasing updates for both the iOS and MacOS at next month's WorldWide Developer Conference, which could help drum up sales for Apple's hardware lines.

However, Apple is warning that the decline in revenue will not be a one-time thing. Guidance for Q3 estimates that revenues of $41-43bn will be down from last year's $49.6bn mark. ®


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