Apple Q2 Earnings See First Quarterly Revenue Drop Since 2003


Apple announced on April 26 its second quarter earnings report, which exhibited the company's first revenue drop since 2003.

Current iPhone sales plummeted from last year, with a 13 percent drop from the second quarter of 2015. This most likely contributed to the first income decline of the company in more than a decade, turning heads to Apple's possible saving grace - the Apple watch, which has sold two times more than the iPhone.

Apple is also predicting that another more than 13 percent income drop will occur in the current quarter, pulling the stock price of the company down to more than 5 percent on the same day of the announcement.

Apply By The Numbers

In the latest quarterly financial report of Apple, which ended on March 26, the company revealed that its post quarterly income is $50.6 billion, with a quarterly net revenue of $10.5 billion or $1.90 per diluted share.

During the same time last year, the revenue of Apple reached $58 billion, with a net income of $13.6 billion or $2.33 per diluted share.

The gross margin also dropped from 40.8 percent in January-March 2015 to 39.4 percent this year.

Company sales were said to be responsible for 67 percent of the final quarterly revenue.

Apple remains positive with its CEO Tim Cook saying the company is happy with the persistent strong development in income through their services. He specifically thanked the power of the Apple ecosystem and the growing foundation of more than a billion active devices.

"Our team executed extremely well in the face of strong macroeconomic headwinds," says Cook.

Giving Back To Shareholders

Apple also said that the Board of Directors has allowed a $50 billion-increase in its return capital program geared for shareholders. Through this, the company is looking at stashing a cumulative amount of $250 billion come March 2018.

Apple CFO Luca Maestri says the company has produced a solid cash flow of $11.6 billion and has returned $10 billion to shareholders.

Looking Forward

Apple also released some points for guidance as it enters the third quarter of fiscal year 2016. These include an expected revenue between $41 billion and $43 billion, a gross margin between 37.5 percent to 38 percent, operating costs of $6 billion to 6.1 billion, taxes of 25.5 percent and other revenue/cost of about $300 million.

The webcast replay of Apple's complete Q2 earnings report conference call will be available after two weeks.

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