Home India First ever profit decline recorded by Apple in 16 years

First ever profit decline recorded by Apple in 16 years

Apple earnings

Apple announced its first ever decline in net profits when it released its results for the second fiscal quarter of 2016.

According to the results, a total revenue of $50.6 billion was recorded with a net profit of $10.5 billion for the quarter, down by $3.1 billion in the same quarter last year. A 6% reduction in Apple’s share price caused it to trade at $1.90 per share as opposed to $2.33 per share in 2015.

According to Apple’s results for Q1 2015, the company disclosed a total revenue of $58 billion dollars and a net profit of $13.6 billion.

Although the company has recorded its first decline in profit since 2003, CEO- Tim Cook addressed the issue by saying the ‘they are happy with the strong growth in revenue from ‘Services’. Apple provides on-demand services like Apple Music, TV Shows, Podcasts as well as Apple TV to a user base of over one billion devices.


International sales accounted for 67% of the Q1’s earnings, with a dip in overall sales: iPhones (51 million devices compared to 61.2 in 2015), iPads (10.25 million from 12.6 million in 2015) and Macs (4.03 million units, down from 4.56 million in 2015).

With a gross margin of 39.4% for Q1 2016, the company expects to see it fall between 37.5 and 38% in Q2 2016, with a revenue of $41- $43 billion. Apple also announced that it will increase the limit on its share repurchase authorization, increasing it to $175 billion from the current $140 billion.

The company expects to spend approximately $250 billion in cash in lieu of their capital return program by March 2018. Proof of their word can be found in the announcement stating a $0.05 increase in divided per share for the quarter.

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