Apple Q2 Revenue Falls 13% Marking First Sales Decline Since 2003
Apple's Q2 results were below analyst expectations and mark the first time since 2003 that the company's revenue has declined.
Apple's string of 13 years of quarterly revenue reports without a decline, dating back to 2003, came to an end April 26 as the company reported second-quarter 2016 revenue of $50.6 billion, 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 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.
In January, the company reported Q1 2016 revenue of $75.9 billion, which was a new Apple record, but 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.