After Its Q2 Earnings Decline, Apple Now Loses Investor Carl Icahn

By Todd R. Weiss  |  Posted 2016-05-01 Print this article Print
Apple, iPhone, China, iTunes, revenue, Carl Icahn, stock

On April 26, Apple announced its second-quarter 2016 earnings and saw a quarterly decline in revenue for the first time since 2003. Apple reported revenue of $50.6 billion, which was 13 percent lower than the $58 billion the company posted one year ago. Net income was also down in Q2 to $10.5 billion from $13.6 billion a year ago as sales of the company's flagship iPhone smartphones leveled off, ending Apple's enviable 13-year record of uninterrupted sales growth. Apple's latest iPhone 6 models went on sale last September.

Apple also missed analysts' revenue estimates as it reported $50.6 billion in sales, below the $51.97 billion average estimate of 34 financial analysts who were surveyed by Thomson Reuters in advance of the earnings report. The company also reported earnings per diluted share of $1.90, which is down from $2.33 per share one year ago. The $1.90 EPS was also below the average estimate of $2.16 EPS reported by analysts.

One year ago, Apple's global revenue continued its then-usual climb in Q2 2015, reaching $58 billion, a 27 percent jump from $45.6 billion in the same period in 2014, while its net profit rose 33 percent to $13.6 billion from $10.2 billion in Q2 2014. Contributing to that success were the sales of 61.2 million iPhones globally, as well as 12.6 million iPads and 4.6 million Mac computers along with about $5 billion in sales from the iTunes Store, the App Store and other Apple services.

The latest results were a big contrast from January, when the company reported Q1 2016 revenue of $75.9 billion, which was a new Apple record. But a problem appeared that was disconcerting—its sales of 74.7 million iPhones were flat from the 74.5 million that were sold in the same quarter a year earlier. The company's Q1 net income was $18.4 billion, which set another quarterly record, up from $18 billion in January of 2015. Earnings rose to $3.28 per diluted share, up from $3.06 in the same quarter in January 2015.

In its latest quarter, Apple reported sales of 51.2 million iPhones, which is down 18 percent from the 61.2 million iPhones sold in the same quarter one year ago. The Q2 2016 iPhone sales fell even more precipitously—by 32 percent—from the 74.78 million that were sold in the first quarter of 2016. Revenue from iPhone sales fell to $32.9 billion in Q2, down 18 percent from $40.3 billion one year ago.



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