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How iPhone Sales Came in for Apple in 3Q

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Price movement

Apple (AAPL) has a market cap of $533.6 billion. It fell by 0.69% to close at $96.67 per share on June 26, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -3.2%, 3.5%, and -7.1%, respectively, on the same day. AAPL is trading 0.27% below its 20-day moving average, 0.24% below its 50-day moving average, and 6.2% below its 200-day moving average.

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Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 0.87% of its holdings in Apple. The ETF tracks a cap-weighted index that measures the largest 2,500 stocks in the United States. The YTD price movement of SCHB was 6.9% on July 26.

The market caps of Apple’s competitors are as follows:

  • Alphabet (GOOG): $502.8 billion
  • Microsoft (MSFT): $440.1 billion
  • IBM (IBM): $154.1 billion

Performance of Apple in fiscal 3Q16

Apple reported fiscal 3Q16 net sales of $42.4 billion, a fall of 14.5% from the net sales of $49.6 billion in fiscal 3Q15. Revenue of iPhone and Mac products fell by 23.3% and 13.1%, respectively, and revenue of iPads and services rose by 7.5% and 18.9%, respectively, between fiscals 3Q15 and 3Q16.

Revenue from the Americas, Europe, Greater China, and Rest of Asia-Pacific segments fell by 11.1%, 6.8%, 33.1%, and 19.5%, respectively, and revenue from Japan rose by 22.9% between fiscals 3Q15 and 3Q16. The company’s gross profit margin and operating income fell by 4.4% and 28.4%, respectively.

Its net income and EPS (earnings per share) fell to $7.8 billion and $1.42, respectively, in fiscal 3Q16, compared with $10.7 billion and $1.85, respectively, in fiscal 3Q15.

AAPL’s cash and cash equivalents and inventories fell by 13.7% and 22.1%, respectively, between fiscals 4Q15 and 3Q16. Its current ratio rose to 1.3x and its debt-to-equity ratio fell to 1.42x in fiscal 3Q16, compared with 1.1x and 1.43x, respectively, in fiscal 4Q15.

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Quarterly dividends

Apple has declared a cash dividend of $0.57 per share on its common stock. The dividend will be paid on August 11, 2016, to shareholders of record at the close of business on August 8, 2016.

Projections

The company has made the following projections for fiscal 4Q16:

  • revenue: $45.5 billion–$47.5 billion
  • gross margin: $37.5%–38%
  • operating expense: $6.1 billion–$6.2 billion
  • tax rate: 25.5%

In the next part of this series, we’ll discuss Kimberly-Clark.

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