10-QPeriod: Q1 FY2017

Apple Inc. Quarterly Report for Q1 Ended Dec 31, 2016

Filed February 1, 2017For Securities:AAPL

Summary

Apple Inc. reported its financial results for the first quarter of fiscal year 2017, ending December 30, 2016. The company demonstrated a solid performance with net sales increasing by 3% to $78.35 billion compared to the prior year's quarter. This growth was primarily driven by robust performance in the iPhone and Services segments, which helped offset declines in iPad sales. Diluted earnings per share saw a positive increase to $3.36 from $3.28 in the comparable prior-year period. The company continues to manage its significant cash reserves effectively, showing strong cash generation from operations. Apple also actively returned capital to shareholders through substantial share repurchases and dividend payments, underscoring its commitment to shareholder value. Despite a slight decrease in gross margin percentage, Apple's strategic focus on innovation and its expanding services ecosystem suggest continued resilience and potential for future growth.

Financial Highlights

56 data points
Beta

Revenue

$78.35B

38.5% Gross Margin

Net Income

$17.89B

22.8% Net Margin

EPS (Diluted)

$0.84

Total Assets

$331.14B

Cash & Equivalents

$16.37B

Free Cash Flow

$23.90B

Financial Statements
Beta
Revenue$78.35B
Cost of Revenue$48.17B
Gross Profit$30.18B
R&D Expenses$2.87B
SG&A Expenses$3.95B
Operating Expenses$6.82B
Operating Income$23.36B
Interest Expense$525.00M
Net Income$17.89B
EPS (Basic)$0.84
EPS (Diluted)$0.84
Shares Outstanding (Basic)21.19B
Shares Outstanding (Diluted)21.31B

Key Highlights

  • 1Net sales increased by 3% to $78.35 billion year-over-year, driven by iPhone and Services growth.
  • 2Diluted earnings per share rose to $3.36 from $3.28 in the prior year's comparable quarter.
  • 3iPhone sales grew 5% to $54.38 billion, remaining the dominant revenue driver at 69% of total net sales.
  • 4Services revenue showed strong growth of 18%, reaching $7.17 billion, fueled by the App Store and AppleCare.
  • 5iPad sales declined significantly by 22% to $5.53 billion.
  • 6The company returned substantial capital to shareholders, with $10.9 billion in share repurchases and $3.1 billion in dividends paid during the quarter.
  • 7Gross margin decreased to 38.5% from 40.1% year-over-year, attributed to product cost structures and currency fluctuations.

Frequently Asked Questions

Apple's net sales increased by 3% to $78.35 billion in the first quarter of fiscal year 2017 (ending December 30, 2016) compared to $75.87 billion in the same quarter of fiscal year 2016.

The primary drivers of revenue growth were strong performance in the iPhone segment, which saw a 5% increase in net sales, and a significant 18% increase in Services revenue, primarily from the App Store and AppleCare.

Apple generated $27.06 billion in cash from operating activities. During the quarter, the company repurchased $10.9 billion of its common stock and paid $3.1 billion in dividends and dividend equivalents, demonstrating a strong commitment to capital return.

iPhone sales grew 5%, Mac sales grew 7%, and Services revenue grew 18%. However, iPad sales declined by 22%, and 'Other Products' (including Apple TV, Apple Watch, iPods, and accessories) decreased by 8%.