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You are here: MacNN Forums > News > Mac News > Apple earns $50.6 billion in fiscal Q2, misses analyst estimates

Apple earns $50.6 billion in fiscal Q2, misses analyst estimates
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NewsPoster
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Apr 26, 2016, 04:49 PM
 
Apple revenues fell by $11 billion year-over-year to $50.6 billion in its second 2016 fiscal quarter, reporting its first drop in quarterly revenue since 2003, the company has announced. The results missed consensus analyst estimates of $52.2 billion in revenue, though they fell within Apple's guidance of between $50 billion and $53 billion. Profits were $13.6 billion, while earnings per share was reported as $2.32, above estimates. Gross margin fell incrementally, from 40.1 percent to 39.4 percent over the same quarter last year.

"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." The strong US dollar has been a thorn in the side of the company for the last two years, given that the majority of its sales come from overseas.

The company also announced that its Board of Directors has authorized an increase of $50 billion to the its share repurchase program. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March, 2018. As part of the updated program, the board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. Apple also expects to continue to net-share-settle vesting restricted stock units.

"We generated strong operating cash flow of $11.6 billion, and returned $10 billion to shareholders through our capital return program during the March quarter," said Luca Maestri, Apple's CFO. "Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion."

The Board has approved an increase of 10 percent to the Company's quarterly dividend, and has declared a dividend of $.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.

For the June quarter, Apple is guiding revenues between $41 billion and $43 billion, and a gross margin of between 37.5 and 38 percent. Apple is expecting operating expenses of between $6 billion and $6.1 billion, along with other income expense of $300 million in the third fiscal quarter, which ends June 30.

The tax rate for that quarter is expected to be 25.5 percent. The quarterly dividend will increase by 10 percent to 57 cents per share, and will pay out on May to shareholders of record as of May 9. MacNN will provide live coverage of the conference call with analysts beginning at 5PM Eastern today.
( Last edited by NewsPoster; Apr 26, 2016 at 04:50 PM. )
     
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Apr 26, 2016, 05:26 PM
 
This is a very common but strange language we hear a lot these days, "...misses analyst estimates."

What if the analyst got it wrong? Or is it that analysts are absolute and everyone else has to live up to their expectations?

Sounds weird to me.
     
Mike Wuerthele
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Apr 26, 2016, 06:04 PM
 
It is strange, and I'm not sure why so much emphasis is put on third parties.
     
Charles Martin
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Apr 26, 2016, 06:18 PM
 
I'm the last person in the world to defend analysts, but most of them do in fact make good-faith guesses (sorry, "estimates") of where sales should be, considering as many factors as they know of. The stock price is thus very dependent on these estimates, because most investors rely on them to figure out if the company is doing as well as it should (is well-managed, etc). If a company misses estimates (any company), stock usually drops because casual investors get nervous, and many don't think long term.

Long term people know how to look at a chart of Apple's growth over long periods of time (or just since Tim took over, for that matter) against the data on how the economy has done generally (not as well) and make their own conclusions about what's likely to happen, barring freak events like the 2008 market meltdown. For everyone else, there's analysts.
Charles Martin
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Vulpine
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Apr 26, 2016, 07:29 PM
 
@ Herbert: When it comes to Apple, so-called market "analysts" have a bad habit of over-estimating Apple's numbers, even when Apple has specifically stated what they would see in the previous quarterly report. Apple has almost always been near the center of their previous "guidance" but these analysts think they know better every time. The problem is that their investors want to believe the analysts more than Apple, despite Apple's track record of accuracy.
     
billearl
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Apr 26, 2016, 07:52 PM
 
I find equating earnings to revenues annoying. They are two very different things.
     
DiabloConQueso
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Apr 26, 2016, 11:30 PM
 
"When it comes to Apple, so-called market "analysts" have a bad habit of over-estimating Apple's numbers"

Apple has consistently, year after year, for nearly an entire decade, beaten analyst's estimates in both revenue and sales.

While this article only looks at the iPhone (which is the product that is their largest moneymaker, by far), it's a testament to Apple's decade-long run of beating analyst estimates the overwhelming majority of the time:

http://www.reuters.com/article/us-apple-results-idUSKCN0XN22I
     
jpellino
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Apr 27, 2016, 10:03 AM
 
Stock returns to Feb 29 price and the internet pundits lose their collective minds.
Just sayin'
     
   
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