Apple reported its fiscal Q2 2016 earnings on Tuesday, showing revenue of $50.6 billion and $10.5 billion, or $1.90 per diluted share, for its fiscal 2016 second quarter ended March 26, 2016. These results compare to revenue of $58 billion and net income of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter.
Gross margin was 39.4% compared to 40.8% in the year-ago quarter. International sales accounted for 67% of the quarter’s revenue. Apple sold 51.1 million iPhones, (an 18% year-over-year drop), 10.2 million iPads, (an 19% drop), and 4 million Macs. As usual, no numbers were reported for the Apple Watch or Apple TV.
“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.”
“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.”
Apple is providing the following guidance for its fiscal 2016 third quarter:
- Revenue between $41 billion and $43 billion
- Gross margin between 37.5 percent and 38 percent
- Operating expenses between $6 billion and $6.1 billion
- Other income/(expense) of $300 million
- Tax rate of 25.5 percent
The Company also announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders. 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. The Company also expects to continue to net-share-settle vesting restricted stock units.
The Board has approved an increase of 10% 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.
Apple will provide live streaming of its Q2 2016 financial results conference call beginning at 2:00 p.m. PST today, Tuesday, April 26, 2016 at www.apple.com/investor/earnings-call/. We’ll be liveblogging the call, so be sure to visit us here at 2:00PM PST.
