On 25 October 2016 Apple reported its financial results for its fiscal fourth quarter 2016, the quarter ended 24 September 2016. Here, you'll find out how many iPhones, iPads, Macs and Watches Apple sold during the past few months, how to listen again to Apple's earnings call, and what the numbers mean - for you, for Apple's product portfolio, and for Apple's corporate health.
Apple financial report: Q4 2016 financial results
For Q4 2016, Apple reports:
- Quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share, down 9 percent on revenue of $51.5 billion and down 19 percent on net income of $11.1 billion, or $1.96 per diluted share, in the same quarter a year ago. (It's the third quarter in a row to be down in revenue year-on-year.)
- Gross margin of 38 percent, compared to 39.9 percent a year ago.
- International sales accounted for 62 percent of the quarter's revenue.
- Apple's board of directors has declared a cash dividend of $.57 per share of common stock. The dividend is payable on 10 November.
- The company also reported results for the fiscal year 2016. Yearly revenue was $215.6bn, down 8 percent on the $233.7bn it recorded in fiscal 2015.
- Finally, Apple reported that it has cash reserves of $237.6bn, a sequential increase of $6.1bn.
Tim Cook commented: "Our results for the September quarter were very strong. We're thrilled with the customer response to iPhone 7 and iPhone 7 Plus; these are the best iPhones we've ever made." He called fiscal 2016 "another incredible year". And chief financial officer Luca Maestri pointed out the revenue was up in some emerging markets, including Russia, Turkey and the Middle East.
But it's impossible to get away from the fact that these are mildly disappointing numbers by Apple's stratospheric standards.
Apple financial report Q4 2016: How does this compare with Apple's predictions?
It's at the upper end of what was expected. While posting Apple's Q3 results back in July, Tim Cook offered the following cautious guidance for Q4:
- Revenue between $45.5 billion and $47.5 billion
- Gross margin between 37.5 percent and 38 percent
- Operating expenses between $6.05 billion and $6.15 billion
- Other income (expense) of $350 million
- Tax rate of 25.5 percent
Apple financial report Q4 2016: How many iPhones did Apple sell?
Apple sold 45.513 million iPhones in Q3 2016. That's 5.3 percent down on the same quarter last year: in Q4 2015 Apple sold 48.046 million iPhones.
With an ASP (average selling price) of $619 in Q4, Apple's iPhone sales generated a revenue of $28.16bn this quarter. That represents a year-on-year drop of 12.6 percent on the $32.209 billion Apple made from iPhone sales in Q4 2015.
Selling 45 million phones is a phenomenal performance by almost any company's standards: a huge number of phones and a colossal amount of revenue. But by Apple's standards it's actually a little disappointing, and the importance of the iPhone to Apple's fortunes is such that even this small dip in sales is a little worrying.
Cook tried to put a brave face on the numbers, referring to "continued improvement in year-over-year performance compared to the last two quarters" and pointing out that iPhone sales were up year-on-year "in 33 of our top 40 markets". Which is all very well, but presumably those 33 don't include China or the US.
[Apple sold 40.4 million iPhone units in Q3 2016, generating revenue of $24bn.]
Apple financial report Q4 2016: How many iPads did Apple sell?
Luca Maestri reported that iPad revenue was flat compared to last year. Apple sold 9.267 million iPads, down 6.2 percent on the same quarter last year, when Apple sold 9.883 million iPads.
Revenue, again based on reported ASP (of $459, which Apple pointed out was $26 up on a year ago), was $4.255bn, fractionally down on the $4.276bn it made in the same quarter a year ago.
Looking on the bright side time: Luca Maestri claimed that in the US this quarter, Apple had a 82 percent share of tablets priced above $200.
[Apple sold 10 million iPad units in Q3, making $4.9bn.]
Apple financial report Q4 2016: How many Macs did Apple sell?
Apple sold 4.886 million Macs in Q4 2016 and revenue of $5.739bn - a real disappointment, given that Apple sold 5.709 million Macs in Q4 2015, generating revenue of $6.882bn. Unit sales are therefore down 14.4 percent year-on-year, while revenue is down by 16.6 percent.
Luca Maestri complained about the year-on-year comparison here, pointing out that the launch of new Macs in spring 2015 contributed to that year's performance - although most Mac fans will be screaming at their screens right now that Apple could and should have done something similar this year. Hopefully new Macs will dazzle us on 27 October. (Maestri implied as much, stating that "We will have some exciting news to share with current and future Mac owners very soon.")
The Mac installed base reached a new all-time high at the end of the September quarter, Maestri added.
[Apple sold 4.3 million Macs in Q3 2016, generating revenue of $5.2bn.]
Read next: Mac buying guide
Apple financial report Q4 2016: How many Apple Watches did Apple sell?
We don't know, since Apple continues to fold Apple Watch sales into its Other Products category, which we report on in the next section. But Luca Maestri did insist that "we're off to a great start with Apple Watch Series 2".
Of course, the Other Products category report does tell us that the absolute maximum revenue Apple can have made from the Apple Watch this quarter is a pretty minor $2.373bn.
Apple financial report Q4 2016: Other Products
Apple made $2.373bn from Other Products in Q4 2016. That's a decrease of 22 percent on the $3.048 Apple made from Other Products in Q4 2015.
As well as the Apple Watch, the Other Products category includes iPods, the Apple TV, routers and accessories of various kinds.
Apple financial report Q4 2016: Services
Tim Cook proclaimed Q4 "a record-setting quarter for services". Revenue for the quarter was $6.325bn, up 24 percent on the same quarter last year.
Apple's music revenue grew by 22 percent, which Cook credited to to the growing popularity of Apple Music. And Apple Pay transactions were up nearly 500 percent year-on-year for the September quarter: in fact, there were more transactions in the month of September than in all of 2015, Cook said.
Apple financial report Q4 2016: Predictions for Q1 2017
Apple is providing the following guidance for the fiscal first quarter of 2017:
- 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