Apple releases Q4 2016 earnings, sales continue to decline

On October 25, just two days prior to their October keynote event at their headquarters in Cupertino, CA, tech giant Apple, Inc. (NASDAQ: AAPL) released the earnings report for the last quarter of their 2016 fiscal year.

The company lauded their Services unit, which brought in USD $6.33 billion, a 24% jump from the fourth quarter of last year. The App Store was a major contributor to this unit, showing a year-over-year increase in global sales of 43%. One key app for the App Store was Pokemon Go, noted Gene Munster, an analyst with firm Piper Jaffray. The App enjoyed sales of over USD $125 million. This app alone accounted for 2% of total revenue for the entire Services unit.

Despite the large gains in the Services unit (which made up 13.5% of all sales), total corporate revenue for the quarter was USD $46.9 billion. This is an 8.9% drop from Q4 2015. Apple’s sales revenues have been declining over the past few years, and this report was more of the same. However, analysts believe this report could show a slowdown in declining sales.

iPhone sales were a drag on the company, with total iPhone sales falling 13% from last year. This is most likely due to the limited availability of the new iPhone 7 and iPhone 7 Plus, as well as the short retail window included in the quarter. Overall, gross margin (a measure of the difference between revenue and cost) was 38%, a 2% drop from last year.

Apple also released a statement predicting revenue for Q1 2017 to land between $76 and $78 billion, a 1.5% year-over-year increase. Whether or not Apple will hit this goal remains to be seen. The newly announced Macbook Pro lineup will definitely help contribute to these sales numbers.

Apple stock fell 2.3% to close at 115.59 the day of the report. Year to date, Apple stock is up 9.7%.

Source(s)