Q2 2016 (technically their Q3) – Apple Earnings Call Summary

Apple

Below are my key takeaways from the Apple Q3 2016 Earnings Call on July 26:

Summary:

Successfully launched the iPhone SE.  Switchers accounted for the highest percentage of iPhone sales ever.  Grew services business by 19% YoY and had highest App Store revenue ever.  Returned $13B to investors through share repurchases and dividends.

Very bullish in China and India.  In China, opened 41st Greater China retail store saw install base of iPhones grow by 34% YoY, making it the most common brand on country’s mobile network. In first 9 months of the year, have already seen $40B, up 55% from same time frame last year.  In India, the first three quarters of the year saw iPhone sales up 51% YoY.

Apple Pay is being used in 75% of contact-less payments in the US.  More than 11MM contactless ready locations in the countries where Apple Pay is available including 3MM locations in the US.

Financial Metrics:

  • Net Sales: $42,358MM
    • Q3 2015: $49,605MM
  • Operating Income: $10,105MM
    • Q2 2015: $14,083
  • Net Income: $7,796MM
    • Q2 2015: $10,677MM
  • EPS: $1.43
    • Q2 2015: $1.86

Product Unit Sales:

  • iPhone: 40,399MM
    • Q2 2016: 51,193MM
    • Q3 2015:47,534MM
  • iPad: 9,950MM
    • Q2 2016: 10,251MM
    • Q3 2015: 10,931MM
  • Mac: 4,252MM
    • Q2 2016:4,034MM
    • Q3 2015: 4,796MM

List of Key Properties:

Forward Thinking:

  • Launch of iOS 10 and Watch OS3 in the fall.  Will provide better continuity among devices.  e.g. With authenticated Apple Watch you will be able to auto unlock your laptop without a password or with Universal Clipboard, can copy/paste images, text and even video between Apple iOS devices, and can automatically access the files on Mac desktop and document folders from another Mac, iOS device or even a PC
  • Expect services business to be the size of a Fortune 100 company in 2017
  • Optimistic about China, and will open retail sales in India
  • Siri will be opened to developers in the fall
  • Apple Pay will launch on Safari, and in France, Switzerland and Hong Kong for a total of 9 markets.

Links to Company Website:

Please comment below if there are data points from Apple you’d like me to include in their next Earnings Call Summary.

 

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