Apple disappoints investors despite 38 percent higher profit

Posted on Wednesday, Jul 22 2015 @ 12:44 CEST by Thomas De Maesschalck
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Apple announced fiscal third quarter revenue of $49.6 billion and net profit of $10.7 billion, or $1.85 per share. It is truly impressive how hard Apple keeps growing, compared to just a year ago Apple's revenue soared 33 percent while its profit rose 38 percent.

Despite beating earnings expectations, Apple shares are currently down 5.42 percent in pre-market trading as investors were spooked by the fine print. Not only did Apple's iPhone shipments came in lower than anticipated but the company also warned it's facing currency headwinds due to the strong dollar and saw a big quarter-over-quarter drop in sales in China. Sales in the Greater China region were down 21 percent versus the previous quarter.

Apple sold 47.5 million iPhones and 4.8 million Mac computers, up from 35.2 million and 4.5 million a year ago, respectively. iPad sales on the other hand fell from 13.3 million to 10.9 million units in the same timeframe. Unfortunately, Apple didn't share any specifics about the sales of its Apple Watch, other than that the device sold more units in its first nine weeks than the iPad did in the same period.
Apple® today announced financial results for its fiscal 2015 third quarter ended June 27, 2015. The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

The growth was fueled by record third quarter sales of iPhone® and Mac®, all-time record revenue from services and the successful launch of Apple Watch™.

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

“In the third quarter our year-over-year growth rate accelerated from the first half of fiscal 2015, with revenue up 33 percent and earnings per share up 45 percent,” said Luca Maestri, Apple’s CFO. “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program.”

Apple is providing the following guidance for its fiscal 2015 fourth quarter:

  • revenue between $49 billion and $51 billion
  • gross margin between 38.5 percent and 39.5 percent
  • operating expenses between $5.85 billion and $5.95 billion
  • other income/(expense) of $400 million
  • tax rate of 26.3 percent

    Apple’s board of directors has declared a cash dividend of $.52 per share of the Company’s common stock. The dividend is payable on August 13, 2015, to shareholders of record as of the close of business on August 10, 2015.

  • About the Author

    Thomas De Maesschalck

    Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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