Despite perceived iPhone 7 headwinds, Apple 4Q16 earnings down 9 percent

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Apple CEO Tim Cook characterized its earnings results as “very strong,” being near the high end of its forecast range for its fourth fiscal quarter.

It reported gross revenues of $46.85 billion, down approximately 9 percent from the year before, though up 11 percent sequentially. Operating income fell by 20 percent to $11.76 billion while net income declined 19 percent to $9.01 billion. Annual net revenue slid 10 percent to $84.26 billion — the first time in 15 years. Net income fell 14.5 percent to $45.69 billion.

  • 45.5 million iPhones were sold, down 5 percent, with revenues totaling $28.2 billion, down 13 percent. There was an extra week in Apple’s fiscal quarter.
  • iPad unit sales were down 6 percent to 9.27 million, but revenue was down by $21 million to $4.26 billion.
  • Mac unit sales dropped 14 percent to 4.89 million. Revenue was down 17 percent to $5.74 billion.
  • Services revenue rocketed 24 percent to $6.33 billion, an all-time quarterly record.
  • Other revenue, which includes Apple TV, Apple Watch, Beats, iPod and accessories, sunk 22 percent to $2.37 billion.

CFO Luca Maestri saw growth in the Japan and Latin America markets while Cook was looking forward to the propagation of the Apple brand in India with a promotion with wireless IP upstart Reliance Jio. China is also still a developing target market with LTE still gaining gills and a middle class still growing.

Looking ahead to the full-bore holiday quarter, Apple is hoping that two new iPhones, a new Apple Watch and a new MacBook Pro will help it launch back to annual growth with revenue between $76 billion and $78 billion. After costs, that could be $28.9 billion and $30 billion.

One major stumbling block for the iPhone 7 going forward is supply constraints as analysts have been asking about if the company can stock the Plus model up to demand.

“On iPhone 7 we will, on iPhone 7 Plus, we aren’t sure,”  Cook said. “I wouldn’t say for sure because the underlying demand for that product is extremely strong.”

Long shipping times could put a damper on that high-rolling iPhone 7 Plus. Add a volatile currency market and we could probably see where this forecast might be held by strings. Maybe the Note 7 factor might not be able to help? We shall see.

Source: Apple
Via: The Verge

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.