Capital Return Program Expanding to $250 Billion
Apple® today announced financial results for its fiscal 2016
second quarter ended March 26, 2016. The Company posted quarterly
revenue of $50.6 billion and quarterly net income of $10.5 billion,
or $1.90 per diluted share. 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 percent
compared to 40.8 percent in the year-ago quarter. International
sales accounted for 67 percent of the quarter’s revenue.
“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.”
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.
“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.”
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 percent 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.
From the inception of its capital return program in August 2012
through March 2016, Apple has returned over $163 billion to
shareholders, including $117 billion in share repurchases.
The Company plans to continue to access the domestic and
international debt markets to assist in funding the program. The
management team and the Board will continue to review each element
of the capital return program regularly and plan to provide an
update on the program on an annual basis.
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
Apple will provide live streaming of its Q2 2016 financial
results conference call beginning at 2:00 p.m. PDT on April 26,
2016 at www.apple.com/investor/earnings-call/. This webcast will
also be available for replay for approximately two weeks
thereafter.
This press release contains forward-looking statements including
without limitation those about the Company’s estimated revenue,
gross margin, operating expenses, other income/(expense), tax rate,
and plans for dividends, share repurchases and public debt
issuance. These statements involve risks and uncertainties, and
actual results may differ. Risks and uncertainties include without
limitation the effect of competitive and economic factors, and the
Company’s reaction to those factors, on consumer and business
buying decisions with respect to the Company’s products; continued
competitive pressures in the marketplace; the ability of the
Company to deliver to the marketplace and stimulate customer demand
for new programs, products, and technological innovations on a
timely basis; the effect that product introductions and
transitions, changes in product pricing or mix, and/or increases in
component costs could have on the Company’s gross margin; the
inventory risk associated with the Company’s need to order or
commit to order product components in advance of customer orders;
the continued availability on acceptable terms, or at all, of
certain components and services essential to the Company’s business
currently obtained by the Company from sole or limited sources; the
effect that the Company’s dependency on manufacturing and logistics
services provided by third parties may have on the quality,
quantity or cost of products manufactured or services rendered;
risks associated with the Company’s international operations; the
Company’s reliance on third-party intellectual property and digital
content; the potential impact of a finding that the Company has
infringed on the intellectual property rights of others; the
Company’s dependency on the performance of distributors, carriers
and other resellers of the Company’s products; the effect that
product and service quality problems could have on the Company’s
sales and operating profits; the continued service and availability
of key executives and employees; war, terrorism, public health
issues, natural disasters, and other circumstances that could
disrupt supply, delivery, or demand of products; and unfavorable
results of legal proceedings. More information on potential factors
that could affect the Company’s financial results is included from
time to time in the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of the Company’s public reports filed with the SEC, including the
Company’s Form 10-K for the fiscal year ended September 26, 2015,
its Form 10-Q for the fiscal quarter ended December 26, 2015, and
its Form 10-Q for the fiscal quarter ended March 26, 2016 to be
filed with the SEC. The Company assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
Apple revolutionized personal technology with the introduction
of the Macintosh in 1984. Today, Apple leads the world in
innovation with iPhone, iPad, Mac, Apple Watch and Apple TV.
Apple’s four software platforms — iOS, OS X, watchOS and tvOS —
provide seamless experiences across all Apple devices and empower
people with breakthrough services including the App Store, Apple
Music, Apple Pay and iCloud. Apple’s 100,000 employees are
dedicated to making the best products on earth, and to leaving the
world better than we found it.
NOTE TO EDITORS: For additional information visit Apple’s PR
website (www.apple.com/pr), or call Apple’s Media Helpline at (408)
974-2042.
© 2016 Apple Inc. All rights reserved. Apple and the Apple logo
are trademarks of Apple. Other company and product names may be
trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except number of shares
which are reflected in thousands and per share amounts)
Three Months Ended
Six Months Ended
March 26,2016
March 28,2015
March 26,2016
March 28,2015
Net sales $ 50,557 $ 58,010 $ 126,429 $ 132,609 Cost of
sales (1) 30,636 34,354 76,085 79,212
Gross margin 19,921 23,656 50,344
53,397 Operating expenses: Research and development (1)
2,511 1,918 4,915 3,813 Selling, general and administrative (1)
3,423 3,460 7,271 7,060 Total operating
expenses 5,934 5,378 12,186 10,873
Operating income 13,987 18,278 38,158 42,524 Other
income/(expense), net 155 286 557 456
Income before provision for income taxes 14,142 18,564 38,715
42,980 Provision for income taxes 3,626 4,995
9,838 11,387 Net income $ 10,516 $ 13,569 $ 28,877 $ 31,593
Earnings per share: Basic $ 1.91 $ 2.34 $ 5.22 $ 5.43
Diluted $ 1.90 $ 2.33 $ 5.19 $ 5.39 Shares used in computing
earnings per share: Basic 5,514,381 5,793,799 5,536,656 5,818,441
Diluted 5,540,886 5,834,858 5,567,506 5,858,330 Cash
dividends declared per share $ 0.52 $ 0.47 $ 1.04 $ 0.94 (1)
Includes share-based compensation expense as follows: Cost of sales
$ 191 $ 142 $ 395 $ 282 Research and development $ 468 $ 384 $ 934
$ 758 Selling, general and administrative $ 389 $ 401 $ 797 $ 775
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(In millions, except number of shares
which are reflected in thousands and par value)
March 26,2016
September 26,2015
ASSETS: Current assets: Cash and cash equivalents $
21,514 $ 21,120 Short-term marketable securities 33,769 20,481
Accounts receivable, less allowances of $60 and $63, respectively
12,229 16,849 Inventories 2,281 2,349 Vendor non-trade receivables
7,595 13,494 Other current assets 10,204 15,085 Total
current assets 87,592 89,378 Long-term marketable securities
177,645 164,065 Property, plant and equipment, net 23,203 22,471
Goodwill 5,249 5,116 Acquired intangible assets, net 3,843 3,893
Other non-current assets 7,745 5,556 Total assets $
305,277 $ 290,479 LIABILITIES AND SHAREHOLDERS’
EQUITY: Current liabilities: Accounts payable $ 25,098 $
35,490 Accrued expenses 23,208 25,181 Deferred revenue 9,461 8,940
Commercial paper 7,998 8,499 Current portion of long-term debt
2,500 2,500 Total current liabilities 68,265 80,610
Deferred revenue, non-current 3,322 3,624 Long-term debt
69,374 53,463 Other non-current liabilities 33,859
33,427 Total liabilities 174,820 171,124
Commitments and contingencies Shareholders' equity: Common
stock and additional paid-in capital, $0.00001 par value:
12,600,000 shares authorized; 5,478,446 and 5,578,753 shares issued
and outstanding, respectively 29,484 27,416 Retained earnings
102,021 92,284 Accumulated other comprehensive income/(loss)
(1,048) (345) Total shareholders' equity 130,457
119,355 Total liabilities and shareholders' equity $ 305,277
$ 290,479
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Six Months Ended
March 26,2016
March 28,2015
Cash and cash equivalents, beginning of the period $ 21,120
$ 13,844 Operating activities: Net income 28,877 31,593
Adjustments to reconcile net income to cash generated by operating
activities: Depreciation and amortization 5,431 5,054 Share-based
compensation expense 2,126 1,815 Deferred income tax expense 3,092
1,879 Changes in operating assets and liabilities: Accounts
receivable, net 4,620 6,555 Inventories 68 (285) Vendor non-trade
receivables 5,899 2,500 Other current and non-current assets 300
2,448 Accounts payable (9,475) (5,428) Deferred revenue 219 993
Other current and non-current liabilities (2,093) 5,679 Cash
generated by operating activities 39,064 52,803
Investing activities: Purchases of marketable securities (86,242)
(92,523) Proceeds from maturities of marketable securities 9,148
5,871 Proceeds from sales of marketable securities 50,051 48,924
Payments made in connection with business acquisitions, net (140)
(115) Payments for acquisition of property, plant and equipment
(5,948) (5,586) Payments for acquisition of intangible assets (657)
(155) Other (322) 88 Cash used in investing activities
(34,110) (43,496) Financing activities: Proceeds from
issuance of common stock 247 309 Excess tax benefits from equity
awards 264 357 Payments for taxes related to net share settlement
of equity awards (751) (608) Payments for dividends and dividend
equivalents (5,871) (5,544) Repurchase of common stock (13,530)
(12,000) Proceeds from issuance of term debt, net 15,584 11,332
Change in commercial paper, net (503) (2,508) Cash used in
financing activities (4,560) (8,662) Increase in cash
and cash equivalents 394 645 Cash and cash equivalents, end
of the period $ 21,514 $ 14,489 Supplemental cash flow
disclosure: Cash paid for income taxes, net $ 6,630 $ 7,058 Cash
paid for interest $ 565 $ 220
Apple Inc. Q2 2016
Unaudited Summary Data (Units in thousands, Revenue in
millions)
Q2 2016 Q1
2016 Q2 2015 Sequential Change Year/Year
Change Operating Segments
Revenue Revenue
Revenue Revenue
Revenue Americas $19,096 $29,325 $21,316 - 35%
- 10% Europe 11,535 17,932 12,204 - 36% - 5% Greater China 12,486
18,373 16,823 - 32% - 26% Japan 4,281 4,794 3,457 - 11% 24% Rest of
Asia Pacific 3,159 5,448 4,210 - 42% - 25%
Total Apple
$50,557 $75,872 $58,010 -
33% - 13% Q2 2016
Q1 2016 Q2 2015 Sequential Change Year/Year
Change Product Summary Units
Revenue Units
Revenue Units
Revenue Units
Revenue Units
Revenue iPhone (1) 51,193 $32,857 74,779
$51,635 61,170 $40,282 - 32% - 36% - 16% - 18% iPad (1) 10,251
4,413 16,122 7,084 12,623 5,428 - 36% - 38% - 19% - 19% Mac (1)
4,034 5,107 5,312 6,746 4,563 5,615
- 24%
- 24% - 12% - 9% Services (2) 5,991 6,056 4,996 - 1% 20% Other
Products (1)(3) 2,189 4,351 1,689 - 50% 30%
Total Apple
$50,557 $75,872 $58,010 -
33% - 13%
(1)
Includes deferrals and amortization of
related software upgrade rights and non-software services.
(2)
Includes revenue from Internet Services,
AppleCare, Apple Pay, licensing and other services.
(3)
Includes sales of Apple TV, Apple Watch,
Beats products, iPod and Apple-branded and third-party
accessories.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160426006807/en/
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comJoan Hoover,
408-974-4570hoover1@apple.com
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2024 to May 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From May 2023 to May 2024