Apple’s quarterly revenue fell for the first time in more than a decade, as iPhone sales fell compared to a year ago.
The company’s quarterly revenue fell to $50.6 billion compared to the $58 billion from the previous corresponding period. Its quarterly net income fell to $10.5 billion ($A13.61 billion) compared to the $13.6 billion in the same period a year ago. Gross margin was 39.4 per cent compared to the 40.8 per cent in the same quarter last year. International sales accounted for 67 per cent of the quarter’s revenue.
The company’s results are putting more pressure on the world’s most valuable public company to come up with its next big product. Apple sold more than 51.2 million iPhones in the first three months of 2016 – while racking up $US10.5 billion in quarterly profit. That was more than many analysts expected, but still fewer than the 61 million iPhones sold a year earlier.
The company is battling perceptions that its latest iPhones aren’t dramatically different from previous models, as overall smartphone sales are slowing around the world. Apple pulled in $US6 billion from online services, apps and other software.
“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Apple CEO, Tim Cook. “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 authorised an increase of $50 billion to the company’s programme to return capital to shareholders. Under the expanded programme, 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 Apple CFO, Luca Maestri. “Thanks to the strength of our business results, we are happy to be announcing today a further increase of the programme to $250 billion.”
As part of the updated program, the board has increased its share repurchase authorisation 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 company declared a dividend of $.57 per share, payable on May 12.
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.
Apple also announced it has plans to continue to access the domestic and international debt markets to assist in funding the programme. The management team and the board will continue to review each element of the capital return programme regularly and plan to provide an update on the programme on an annual basis.
