14 DAY TRIAL // Apple announced the financial results for the third quarter (Q3) of its fiscal 2016 year, reporting that the iPhone sales are still dropping, but its online services and mobile apps sales revenue has grown rapidly.
While in the Q2 earning report Apple posted a quarterly revenue of $50.6 billion and quarterly net income of $10.5 billion, or $1.90 per diluted share, for Q3, they announce $1.42 per diluted share, or $7.8 billion in net income, on sales totaling $42.4 billion, which means that their earnings are much lower than those posted in the year-ago quarter.
“We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter,” said Tim Cook, Apple’s CEO. “We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June.”
iPhone sales totaled 40.4 million units in fiscal Q3 2016
Apple's financial results in fiscal Q3 2016 show that 63% of revenue comes from international sales and that the gross margin was 38%, compared to 39.7% in the year-ago quarter, so it's no secret anymore that the Cupertino company is losing money because the iPhone sales are dropping fast. Apple also reports that iPhone sales totaled 40.4 million units in fiscal Q3 2016, down from the 47.5 million units sold in Q3 2015.
Probably the best part of this Q3 earning report is that Apple made $6 billion in sales from various of its online services, including Apple Music, iCloud, Apple Pay, and iTunes, and mobile app sales distributed via Apple Store, which means that the respective segment produced more revenue than Apple made from Q3 2016 sales of iPads or Macs.
“Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record,” said Luca Maestri, Apple’s CFO. “We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program.”
The company says it expects its revenue and profit to grow in Q4 2016, somewhere between $45.5 billion and $47.5 billion in sales, and that the gross margin will be between 37.5% and 38%, same as the one for Q3. Furthermore, operating expenses should be between $6.05 billion and $6.15 billion in Q4, other income/expense of $350 million, and tax rate of 25.5%.
UPDATE: Apple's shares have jumped 7 percent in after-hours trading following this announcement.