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Apple posts record profits in Q1, prepares for Q2 decline

By Rachel Weber

Apple posts record profits in Q1, prepares for Q2 decline

Wed 27 Jan 2016 9:33am GMT / 4:33am EST / 1:33am PST

As active install base reaches 1 billion, Apple forecasts first quarterly revenue decline in 13 years


Established in 1976, Apple is a multinational corporation (corporate headquarters based in California)...

Apple has revealed its financial results for the first fiscal quarter of 2016, showing a quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion.

The $18.4 billion profit is now the largest ever recorded by a single public corporation in one quarter, beating the $18 billion Apple earned in the same period last year.

"Our team delivered Apple's biggest quarter ever, thanks to the world's most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV," said CEO Tim Cook in a statement.

"The growth of our Services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices."

In supplemental materials it also revealed an active install base of 1 billion, categorized as "iPhone, iPad, Mac, iPod touch, Apple TV, and Apple Watch devices that have been engaged with our services within the past 90 days.

However, actual unit sales - while still vast in absolute terms - were less encouraging in terms of Apple's ongoing growth. The various models of the iPhone showed only a marginal year-on-year increase, from 74.46 million units to 74.8 million units - that's despite this being the first holiday quarter in which the iPhone 6 was available to buy.

iPad sales declined significantly, falling 21 per cent from 21.4 million units to 16.1 million units versus the same quarter last year. Mac sales fell by 4 per cent to 5.3 million.

The most telling detail, however, was the company's forecast for the second quarter of fiscal 2016, when it expects to earn between $50 billion and $53 billion. Again, these are still huge amounts of money, but that would represent a notable decline over the $58 billion it earned in the same quarter last year. To put that in context, if those figures prove to be accurate it will be Apple's first quarterly decline in 13 years - almost five years before the launch of the iPhone.

"Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment," added CFO Luca Maestri.

"We generated operating cash flow of $27.5 billion during the quarter, and returned over $9 billion to investors through share repurchases and dividends. We have now completed $153 billion of our $200 billion capital return program."

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