Apple Q3 2015 Results: $49.6 Billion Revenue

Jul 30, 2015

Apple has revealed its Q3 financial results tonight, with all eyes on the Apple Watch.

Apple has announced its financial results for the third quarter of fiscal 2015. Find out how Apple’s results compared to what analysts were predicting and how the figures compare to previous years. Here you’ll find out how many iPhones, iPads, Macs, Apple Watches and other products Apple sold during it’s third fiscal quarter of 2015 which ended on 28 June.

Here are the highlights: 

Apple posted revenue of $49.6 billion and made a profit of £10.7 billion

Apple sold:

• 47.5 million iPhones
• 10.9 million iPads
• 4.8 million Macs

How to listen to Apple’s earnings call

Apple’s earnings report conference call started on Tuesday 21 July at 2pm PT, which is 10pm BST. The results will be for the quarter that began on 29 March and ended on 28 June. Apple’s financial year runs from September to September. You’ll be able to listen to the conference call on Apple’s website. 

Apple financial results Q3 2015: How much money did Apple make?

Apple posted revenue of $49.6 billion and made a profit of £10.7 billion. These figures beat it’s own estimates and the year ago period.

This is usually a quiet quarter, so the fact that Apple has broken its own record for the quarter is great news.

Last quarter, Apple announced quarterly revenue of $58 billion and a quarterly net profit of $13.6 billion during its earnings call. Apple revealed that the gross margin for the second quarter of 2015 was 40.8 percent, and international sales accounted for 69 percent of the quarter’s revenue.

Apple’s forecast for Q3 was revenue of between $46 billion and $48 billion, up from $37.4 billion in the same quarter last year.

Analysts, on the other hand, predict a higher revenue of $50.61bn on average, which would represent a 34.6 percent year-over-year increase. Apple didn’t quite hit that target.

Apple financial results Q3 2015: How many iPhones did Apple sell?

 

 

 

Apple announced that it sold 47.5 million iPhones in the three months prior to 28 June 2015. This is lower than the average analyst estimates, but higher than the year ago quarter when Apple sold 35.2 million iPhones.

Apple also made $31,368 billion in revenue from iPhone sales, compared to $19.751 in the same quarter of 2014. Apple CEO Tim Cook said: "We had an amazing quarter, with iPhone revenue up 59 percent over last year."

In the previous quarter, Apple sold 61.2 million units of the iPhone 6 and 6 Plus, making it the second biggest quarter for iPhone sales ever (the first? The previous quarter, when the company sold 74.5 million iPhones).

Analysts had predicted that Apple had sold 49.4 million iPhone units in the quarter, which would be a significant improvement over the year-ago quarter’s unit sales of 35.2 million (up 40% year-over-year and 14.2 million units).

Taking a closer look, the highest prediction from analysts is 56.28m from Credit Suisse analyst Kulbinder Garcha, and the lowest is 43.5m from Oppenheimer analyst Andrew Uerkwitz.

Apple financial results Q3 2015: How many iPads did Apple sell?

Apple announced that it sold 10.931 million iPads in the quarter. This is slightly higher than the average analyst estimates, but lower than the year ago quarter when Apple sold 13.276 million iPads. With the numbers down on the same quarter last year, there are concerns that it suggests that iPad sales are slowing.

Revenue from iPad sales in the quarter was $4.538 billion, which is less than the revenue from Mac sales ($6.030 billion, nearly $1.5 million less).

On average, analysts expected Apple to sell 10.68 million iPad units during the quarter, which would be down on last quarter and down on the 13.28 million iPads sold in the same quarter last year. The lowest prediction comes from indie analyst Lee Storch from The Braeburn Group, who thinks Apple sold just 7.5 million iPads last quarter, whereas Patrick Smellie, also from the Braeburn Group, is more optimistice expecting 13.01m.

For more than a year now, iPad sales have been shaky (year-over-year sales have declined for nine quarters in a row now). Cook still has hopes for the iPad though. During the call with analysts he mentioned the partnership with IBM and also the new iPad productivity features in iOS 9. He didn’t refer to the rumoured iPad Pro.

One reason why iPad sales have slowed may be that despite loving the device, those who currently own an iPad are not yet ready to upgrade to a newer model. Cook said: “I believe that the iPad consumer upgrade cycle will eventually occur because as we look at the usage statistics on iPad, it remains unbelievably great. I mean, the next closest usage of the next competitor, we’re six times greater. And so these are extraordinary numbers. It’s not like people have forgotten iPad or anything, it’s a fantastic product.”

Last quarter, Apple sold 12.62 million iPads, which was down a worrying 23 percent year-over-year. Those sales translated to roughly $5.43 billion, which was lower than the $5.6 billion generated by the Mac during that quarter, representing the first time ever that Mac revenue has surpassed iPad revenue.

During the second quarter results, announced in April 2015, Apple CEO Tim Cook said: "We’re clearly seeing cannibalisation from iPhone and, on the other side, from the Mac. Of course, as I’ve said before, we’ve never worried about that. It is what it is. That will play out. At some point it will stabilise. I’m not sure precisely when but I’m pretty confident that it will."

Apple financial results Q3 2015: How many Apple Watches did Apple sell?

 

 

 

Yes, this is the first full quarter of the Apple Watch’s availability, and as a new product in a previously shaky category we’re all interested to find out whether Apple’s smartwatch has been a hit.

Unfortunately Apple hasn’t revealed the precise figures for Apple Watch sales, in it’s Summary Data document the company bundles Apple Watch with Other Products which also includes Apple TV and iPods, amongst other things. The figure here is disappointing, just $2.641 billion, but that is up on last quarter ($1.689 billion) and up on the same quarter of 2014 ($1.689 billion).

Apple CEO Tim Cook told analysts: “We made the decision back in September not to disclose the shipments on the watch, and that was not a matter of not being transparent, it was a matter of not giving our competition insight [on] a product that we worked hard on.”

The Other category is up $952 million from last quarter (and 49 percent versus the year-ago quarter), but Cook warned against basing Watch estimates on the change in Apple’s Other Products accounting line because “the aggregate balance of that category is shrinking.” In other words, the Apple Watch is doing much better than the figures suggest.

Cook did say that even with the company’s inability to produce enough watches to fulfill demand, Apple sold more of the devices than the company’s executives expected. He said: “Sales of the watch did exceed our expectations, and they did so despite supply still trailing demand at the end of the quarter… In fact, the Apple Watch sell-through was higher than the comparable launch periods of the original iPhone or the original iPad. And so as I look at all of these things, we feel really great about how we did.”

Refuting reports that Apple Watch sales started off huge and then tanked, he said that June Apple Watch sales were higher than April and May. “I realize that’s very different from some of what’s being written,” he said, referencing Slice Intelligence data, “but June sales were the highest.”

Looking forward, Apple has high hopes for the Apple Watch in the Christmas shopping quarter. Indeed, the company plans to expand its sales channels in the run up to Christmas, having: “learned a lot about the [Apple Watch] buying experience.”

Cook added: “We’re convinced that the watch is going to be one of the top gifts of the holiday season.”

During its second quarter earnings call, Apple did mention the Apple Watch, which had been on sale for just a few days. Cook said that the company was "very happy" with the reception the Apple Watch had received, but at the time demand was greater than supply.

Analysts were not particularly confident about the Apple Watch’s sales prior to the earnings report. Canalys had forecast that Apple shipped 4.2 million units during the quarter, which is much lower than most new Apple devices after their first full quarter. It would still represent a significant improvement over other wearable devices that have launched so far, but it’s much lower than projections from analysts last year prior to the Apple Watch’s launch, which were as high as 30 million.

Other analysts, as listed by Fortune, projected an average of 4.7 million Apple Watch units, with the lowest prediction coming in at 2.85 from Financial Alchemist analyst Turley Muller and the highest from Sundeep Bakjikar from Jefferies, who estimates 5.7 million units.

However, analysts including experts at Cantor Fitzgerald said they expected sales of the Apple Watch to improve as we approach the Christmas shopping period, as it’ll become the "go-to gift."

Research firm J. Gold Associates gas said that the Apple Watch is "a long-term play" and that "it’s going to take another year or two, not just for Apple but for the market, to understand what it is that consumers really want these smartwatches to do for them. Apple will have to make adjustments and I think it’ll become more popular over time."

Apple has already previewed WatchOS 2, a software update coming to Apple Watch later this year that will bring lots of improvements to the Apple Watch.

Apple financial results Q3 2015: How many Macs did Apple sell?

We’ve been impressed by Apple’s Mac sales for a few quarters now and this quarter didn’t disappoint.

Apple sold 4.796 million Macs in the past three months making revenue of $6.030 billion, the figures slightly missed the average analyst estimates but is actually astonishing growth of 9 percent in a market that market-research firm IDC estimates contracted by 12 percent during the quarter.

What’s interesting here is that the predictions was that PC sales would decline due to increasing tablet sales, and yet, based on the declining sales of iPads, tablets aren’t as popular as anticipated. Despite this, PC sales are declining while Mac sales are increasing.

Mac sales have been growing despite an overall decline in the PC market. In Q2 2015, Apple sold 4.5 million Macs, up 10 percent year-over-year.

For this quarter, analysts were predicting sales of 4.83 million Macs, which would represent another increase over the previous quarter and a 9.4 percent increase year-over-year.

China

Apple’s biggest market is fast becoming China, and while the last two quarters have showed 75 percent year-over-year growth, Apple more than doubled its China revenue in this most recent quarter, compared to the same quarter a year ago. Apple isn’t just growing in China, its growth is accelerating.

Cook emphasized that Apple believes China will ultimately be Apple’s largest market. However, the Chinese stock market and economy has been called into question in recent days and there are concerns that too much of Apple’s current growth is based on the Chinese market. This may be one reason why Apple’s shares are slightly tumultuous at the moment.

Cook isn’t worried, he pointed out that with LTE networking only available in 12 percent of China, there’s an “incredible smartphone future” in the country as broadband speeds improve and online video becomes more viable nationwide.

Next quarter guidance

After announcing the financial results, Apple provided the following guidance for its fiscal 2015 fourth quarter:

• revenue between $49 billion and $51 billion
• gross margin between 38.5 percent and 39.5 percent
• operating expenses between $5.85 billion and $5.95 billion
• other income/(expense) of $400 million
• tax rate of 26.3 percent

There are some concerns that these are low estimates for the fourth quarter and overnight the Apple share price declined to $122.16 from $130.75.

Head to page two for the full rundown of results from Apple’s Q2 2015 earnings call.

Apple has announced its financial results for the second quarter of 2015. Find out how the results compare with previous quarters, and what the results mean to consumers. Plus find out how many iPhones, iPads, Macs and other products Apple sold during the period.

 

Apple’s earnings report took place on Monday 27 April, and were communicated to analysts and press via a conference call and press release. The results are for the quarter that began on 1 January and ended on 28 March. Apple’s financial year runs from September to September. 

Apple financial results Q2 2015: How much money did Apple make?

Apple announced quarterly revenue of $58 billion and quarterly net profit of $13.6 billion during the call, or $2.33 of diluted share. Compared with revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share in the year-ago quarter, so it’s a significant improvement.

Last quarter, which remember was the festive period so always tends to be the most profitable month, Apple posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share.

Apple revealed that gross margin for the second quarter of 2015 was 40.8 percent compared to 39.3 percent in the year-ago quarter. International sales accounted for 69 percent of the quarter’s revenue, compared with 65 percent last quarter.

During last quarter’s earnings call, Apple revealed its predictions for this quarter, suggesting that revenue would be between $52 billion and $55 billion, with a gross margin between 38.5 percent and 39.5 percent, so it exceeded its own expectations.

According to Apple’s press release, the growth was fuelled by record second quarter sales of iPhone and Mac, and all-time record performance of the App Store.

"We are thrilled by the continued strength of iPhone, mac and the App Store, which drove our best March quarter results ever," said Tim Cook, Apple’s CEO.

Apple financial results Q2 2015: How many iPhones did Apple sell?

 

 

 

Taking a closer look at Apple’s successful quarter, the company sold 61.2 million units of the iPhone 6 and 6 Plus during the first three months of 2015, blasting past the 44 million it shipped during the same quarter of last year when the iPhone 5S was still new. It makes the quarter the second biggest for iPhone sales ever. (The first? Last quarter, when the Cupertino company sold 74.5 million iPhones).

The iPhone 6 and 6 Plus have been big hits with customers. Apple had only gradually increased the screen size on the iPhone in recent years while makers experimented and found success with larger screens. The two new iPhones finally matched those larger displays and the result was record sales for the quarter.

That also translated into a higher rate of people switching from competitors to the iPhone, the company said. "We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch," said Cook.

Perhaps even more impressive than the 40 percent year-on-year jump in iPhone unit sales was the 55 percent jump in revenue from those sales. Thanks to higher average selling prices, revenue from iPhones jumped to $40 billion – or 69 percent of all Apple sales.

Analysts expected Apple to sell 58.1 million iPhones, so Apple smashed that prediction.

Apple financial results Q2 2015: How many iPads did Apple sell?

 

 

 

You may have noticed that we haven’t mentioned the iPad so far in this article, and there’s a very good reason for that. For more than a year now (year-over-year sales have declined for eight quarters in a row), iPad sales have been shaky, and concern about the future of the tablet is rife.

This quarter, Apple sold 12.62 million iPads, which is down a worrying 23 percent year-over-year. Those sales translate to roughly $5.43 billion, which is lower than the $5.6 billion generated by the Mac, representing the first time ever that Mac revenue has surpassed iPad revenue.

The decline in sales is bound to spark talk about whether or not Apple will continue to update the iPad yearly or begin updating it less often. There may also be speculation about whether or not the rumoured iPad Pro could help the market or whether the decreasing iPad sales mean that the new product will be a flop, or perhaps not be launched at all.

Analysts had hoped for 13.6 million iPad sales, but Apple didn’t meet that target.

Tim Cook did address some concerns about the iPad’s decline. "We’re clearly seeing cannibalisation from iPhone and, on the other side, from the Mac. Of course, as I’ve said before, we’ve never worried about that. It is what it is. That will play out. At some point it will stabilize. I’m not sure precisely when but I’m pretty confident that it will.

Apple financial results Q2 2015: How many Macs did Apple sell?

 

 

 

Apple has been impressing us with its Mac sales figures over the past few quarters, far surpassing analyst expectations and growing year-on-year and growing market share in the PC market despite the overall decline of PC sales.

We’ve seen yet another good quarter for the Mac. Q2 2015 saw Apple sell 4.5 million units, up 10 percent year-over-year, but because the average price of those computers was lower due to Apple’s new, more affordable starting prices, revenue was only up by 2 percent.

Results didn’t quite match analyst predictions of 4.7 million Macs.

Apple financial results Q2 2015: Apple Watch sales

 

 

 

The Apple Watch only went on sale on 24 April, following a pre-order period that began on 10 April, so we expect to find out more about how successful it’s been next quarter, which will represent the first full quarter of availability.

However, Cook did talk a bit about the Apple Watch during the event, saying that he is "very happy" with the reception the Apple Watch has been enjoying.

"Right now, demand is greater than supply," he said. "By some time in late June, we anticipate being in a position where we can sell the Apple Watch in additional countries."

"Adding to the surprise and delight of Apple Watch are the more than 3500 apps that are already available," Cook continued. "We can’t wait to see more of the inspiring apps developers dream up for Apple Watch as we head into our Worldwide Developers Conference six weeks from now."

Apple financial results Q2 2015: Apple stock

Apple also announced plans to expand a share buyback scheme and raise its dividend for shareholders. The program was started in previous years as a way to burn through some of its substantial cash pile, but it’s generating so much money that the scheme can be expanded.

"We are in a very fortunate position of generating more cash than we need to run our business and make these investments," Cook said, referring to research and development investments and capital expenditures planned by Apple.

Apple financial results Q2 2015: Predictions

Looking ahead, Apple said it expects revenue in the quarter to be between $46 billion and $48 billion, up from $37.4 billion in the same quarter last year.

Apple financial results Q2 2015: New product hints

There wasn’t much in the way of hints at future products, but that doesn’t mean there was nothing. In fact, we’re quite excited about the future of Apple TV after Cook spoke about the success of HBO Now on the device: "I think we’re on the early stages of just major, major changes in media that are going to be really great for consumers and I think Apple can be part of that."

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