Apple released their 4th quarter financial results and their annual results this week and it what has become a quarterly ritual Apple blew by all of the analyst’s predictions for quarterly sales and profits while providing guidance for their 1st Fiscal Quarter that was very strong especially given the huge quarter they had during the holidays last year. Apple posted revenues for the quarter ending on September 30 of $51.5 billion compared to $42.1 billion a year ago. They posted profits of $11.1 billion or $1.96 per diluted share compared to a profit of $8.5 billion and $1.42 per share last year. That made it the best 4th Quarter for Apple ever.
Gross margin was up at 39.9% and international sales were 62% of the revenue. Apple declared a $0.52 dividend and announced that they had $205.6 billion in cash and marketable securities, most of which is held overseas.
If you look at the whole year for Apple, they generated $233.7 billion in sales (clearly a new record for Apple) and $53.4 billion in profit. They predicted that sales would be in the neighborhood of $76 billion with gross margin staying at around 39%.
These numbers are actually even a little better as Apple is reducing revenue recorded for the iPhone upgrade program at the time of the sale and deferring some earnings for each iPhone sold.
Tim Cook talked about Apple impact upon the enterprise market and talked about IBM. IBM now has some 30,000 Macs and growing each week. They have determined what we knew all along that Macs save money! IBM has calculated that Macs save about $270 per Mac versus a traditional PC due to reduced support cost and higher residual value. But we already knew that – it is good that IBM finally gets it, too. Over the last 12 months enterprise business has represented about $25 billion in revenue or a bit over 10% of overall sales.
Total R&D expense in fiscal 2015 was $8.1 billion compared to $6 billion in 2014 and only $3.4 billion in 2012. Apple increased its payroll, now with 110,000 employees versus 92,600 last year.
Apple has paid out over $32.9 billion in dividends to the shareholders of the past three years and $11.4 billion in 2015. That is more than many states’ budgets. Apple also increased shareholder value by buying up over $104 billion of its stock at the bargain prices over the past several months and $14 billion in the 4th quarter alone.
During the quarter Apple sold 48 million iPhones, 5.7 million Macs and an estimate $1.7 billion of Apple watches. They have sold over 300 million devices over the last 12 months. The 5.7 million Macs was an all-time record and Mac revenue was up 4 %. This is at a time with the overall PC market is in decline. iPad sales continued to decline, however, with 9.8 million iPads sold in the year and about $4.3 billion in revenue. However, Apple remains upbeat about the iPad and will expand the iPad line-up next month with the release of the iPad Pro. I think that the upgrade cycle for iPads is more like the upgrade cycle for Macs than the upgrade cycle for iPhones and that may explain some of this decline. Larger iPhones may also lead some to feel that an iPad is not necessary.
Another amazing chapter written in the Apple story. With the naysayers on Wall Street beating down the stock with false concerns, Apple continues to provide first-class products in increasing numbers around the world while investing in future developments that should ensure more success like they have posted with these financial results. We have seen some hints that Apple is thinking about more than profit and I hope that they continue to innovate in a way that improves the lives of people around the world. Innovations such as ResearchKit are important as are Apple’s efforts to use renewable energy sources to power their facilities. As the world’s strongest company they have a big responsibility to lead in corporate responsibility and sustainability.
Once again congratulations to Tim Cook and the whole Apple team for an amazing quarter and fantastic products!