APPLE INC (AAPL) SEC Filing 10-K Annual report for the fiscal year ending Saturday, September 24, 2016
Apple Reports Fourth Quarter Results
Services Revenue Grows 24% to All-Time Quarterly Record of $6.3 Billion
CUPERTINO, California - October 25, 2016 - Apple® today announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. The Company posted quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share. These results compare to revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue.
"Our strong September quarter results cap a very successful fiscal 2016 for Apple," said Tim Cook, Apple's CEO. "We're thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record."
"We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter," said Luca Maestri, Apple's CFO. "We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital return program."
Apple is providing the following guidance for its fiscal 2017 first quarter:
revenue between $76 billion and $78 billion
gross margin between 38 percent and 38.5 percent
operating expenses between $6.9 billion and $7 billion
other income/(expense) of $400 million
tax rate of 26 percent
Apple's board of directors has declared a cash dividend of $0.57 per share of the Company's common stock. The dividend is payable on November 10, 2016 to shareholders of record as of the close of business on November 7, 2016.
Apple will provide live streaming of its Q4 2016 financial results conference call beginning at 2:00 p.m. PDT on October 25, 2016 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.
The following information was filed by APPLE INC on Tuesday, October 25, 2016 as an 8K 2.02 statement, which is a press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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- aapl_10k_2016-10-27_74_67Financial - EarningsIn general, the Company believes gross margins will remain under downward pressure due to a variety of factors, including continued industry wide global product pricing pressures, increased competition, compressed product life cycles, product transitions, potential increases in the cost of components, and potential strengthening of the U.S. dollar, as well as potential increases in the costs of outside manufacturing services and a potential shift in the Companys sales mix towards products with lower gross margins.
- aapl_10k_2016-10-27_70_61Financial - EarningsThe year-over-year increase in the gross margin percentage in 2015 was driven primarily by a favorable shift in mix to products with higher margins and, to a lesser extent, by improved leverage on fixed costs from higher net sales.
- aapl_10k_2016-10-27_39_48Revenue - GeographyThe effect of weakness in most foreign currencies relative to the U.S. dollar also negatively impacted Mac net sales.
- aapl_10k_2016-10-27_70_62Financial - ExpenseThese positive factors were partially offset primarily by higher product cost structures and, to a lesser extent, by the effect of weakness in most foreign currencies relative to the U.S. dollar.
- aapl_10k_2016-10-27_149_200Revenue - ProductFor payment terms in excess of the Companys standard payment terms, revenue is recognized as payments become due unless the Company has positive evidence that the sales price is fixed or determinable, such as a successful history of collection, without concession, on comparable arrangements.
- aapl_10k_2016-10-27_124_155Financial - Shares / EquityIn April 2016, the Companys Board of Directors increased the share repurchase program authorization from $140 billion to $175 billion of the Companys common stock, increasing the expected total size of the capital return program from $200 billion to $250 billion.
- aapl_10k_2016-10-27_69_311Financial - EarningsGross margin decreased in 2016 compared to 2015 due primarily to the effect of weakness in most foreign currencies relative to the U.S. dollar and, to a lesser extent, unfavorable leverage on fixed costs from lower net sales, partially offset by a favorable shift in mix to Services.
- aapl_10k_2016-10-27_13_23Financial - Shares / EquityThis included increasing its share repurchase authorization from $140 billion to $175 billion and raising its quarterly dividend from $0.52 to $0.57 per share beginning in May 2016.
- aapl_10k_2016-10-27_15_33Financial - Shares / EquityThis included increasing its share repurchase authorization to $140 billion and raising its quarterly dividend to $0.52 per share beginning in May 2015.
- aapl_10k_2016-10-27_113_139Financial - EarningsDuring 2016, cash generated from operating activities of $65.8 billion was a result of $45.7 billion of net income, non-cash adjustments to net income of $19.7 billion and an increase in the net change in operating assets and liabilities of $484 million.
- aapl_10k_2016-10-27_114_142Financial - EarningsDuring 2015, cash generated from operating activities of $81.3 billion was a result of $53.4 billion of net income, non-cash adjustments to net income of $16.2 billion and an increase in the net change in operating assets and liabilities of $11.6 billion.
- aapl_10k_2016-10-27_40_49Revenue - ProductThe year-over-year growth in Mac net sales and unit sales during 2015 was driven by strong demand for Mac portables.
- aapl_10k_2016-10-27_58_300Revenue - GeographyGreater China net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
- aapl_10k_2016-10-27_66_308Revenue - GeographyRest of Asia Pacific net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar.
- aapl_10k_2016-10-27_159_237Other - OtherThese circumstances include future demand or market conditions for the Companys products being less favorable than forecasted, unforeseen technological changes or changes to the Companys product development plans that negatively impact the utility of any of these assets, or significant deterioration in the financial condition of one or more of the Companys suppliers that hold any of the Companys manufacturing-related assets or to whom the Company has made an inventory prepayment.
- aapl_10k_2016-10-27_34_41Revenue - ProductiPad net sales decreased during 2016 compared to 2015 primarily due to lower unit sales and the effect of weakness in most foreign currencies relative to the U.S. dollar, partially offset by higher ASPs due to a shift in mix to higher-priced iPads.
- aapl_10k_2016-10-27_29_38Revenue - GeographyAverage selling prices ASPs for iPhone were lower year-over-year during 2016 due primarily to a different mix of iPhones, including the iPhone SE introduced in 2016, and the effect of weakness in most foreign currencies relative to the U.S. dollar.
- aapl_10k_2016-10-27_14_26Revenue - ProductNet sales rose 28% or $50.9 billion during 2015 compared to 2014, driven by a year-over-year increase in iPhone net sales.
- aapl_10k_2016-10-27_30_39Revenue - ProductThe year-over-year growth in iPhone net sales and unit sales during 2015 primarily resulted from strong demand for iPhone 6 and 6 Plus during 2015.
- aapl_10k_2016-10-27_62_304Revenue - ProductJapan net sales increased during 2016 compared to 2015 due primarily to higher net sales of Services and the strength in the Japanese yen relative to the U.S. dollar.
- aapl_10k_2016-10-27_35_45Revenue - GeographyiPad ASPs declined during 2015 compared to 2014, primarily as a result of the effect of weakness in most foreign currencies relative to the U.S. dollar and a shift in mix to lower-priced iPads.
- aapl_10k_2016-10-27_166_260Legal - OtherTherefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in a reporting period for amounts in excess of managements expectations, the Companys consolidated financial statements for that reporting period could be materially adversely affected.
- aapl_10k_2016-10-27_45_288Revenue - ProductThe increase in net sales of Services during 2015 compared to 2014 was primarily due to growth from the App Store and licensing.
- aapl_10k_2016-10-27_59_301Revenue - GeographyGreater China experienced strong year-over-year increases in net sales during 2015 driven primarily by iPhone sales.
- aapl_10k_2016-10-27_79_71Financial - ExpenseThe year-over-year growth in R&D expense in 2016 and 2015 was driven primarily by an increase in headcount and related expenses, and material costs to support expanded R&D activities.
- aapl_10k_2016-10-27_147_192Revenue - ProductManagement believes the Companys critical accounting policies and estimates are those related to revenue recognition, valuation and impairment of marketable securities, inventory valuation, valuation of manufacturing-related assets and estimation of purchase commitment cancellation fees, warranty costs, income taxes, and legal and other contingencies.
- aapl_10k_2016-10-27_14_29Revenue - ProductApple Watch, which launched during the third quarter of 2015, accounted for more than 100% of the year-over-year growth in net sales of Other Products.
- aapl_10k_2016-10-27_13_21Revenue - ProductNet sales declined 8% or $18.1 billion during 2016 compared to 2015, primarily driven by a year-over-year decrease in iPhone net sales and the effect of weakness in most foreign currencies relative to the U.S. dollar, partially offset by an increase in Services.
- aapl_10k_2016-10-27_34_42Revenue - ProductThe Company believes the decline in iPad sales is due in part to a longer repurchase cycle for iPads and some level of cannibalization from the Companys other products.
- aapl_10k_2016-10-27_35_44Revenue - ProductThe Company believes the decline in iPad sales is due in part to a longer repurchase cycle for iPads and some level of cannibalization from the Companys other products.
- aapl_10k_2016-10-27_14_30Revenue - ProductNet sales growth during 2015 was partially offset by the effect of weakness in most foreign currencies relative to the U.S. dollar and lower iPad net sales.
- aapl_10k_2016-10-27_89_78Other - OtherThe lower effective tax rate in 2016 compared to 2015 was due primarily to greater R&D tax credits.
- aapl_10k_2016-10-27_29_37Revenue - ProductThe Company believes the sales decline is due primarily to a lower rate of iPhone upgrades during 2016 compared to 2015 and challenging macroeconomic conditions in a number of major markets in 2016.
- aapl_10k_2016-10-27_92_93Other - OtherIrish legislative changes, effective as of the beginning of 2015, eliminated the application of the tax opinions from that date forward.
- aapl_10k_2016-10-27_93_100Other - OtherASU 2016-06 will be effective for the Company in its first quarter of 2019.
- aapl_10k_2016-10-27_94_104Other - OtherASU 2016-09 will be effective for the Company beginning in its first quarter of 2018.
- aapl_10k_2016-10-27_96_108Other - OtherASU 2016-02 will be effective for the Company beginning in its first quarter of 2020, and early adoption is permitted.
- aapl_10k_2016-10-27_97_112Other - OtherASU 2016-01 will be effective for the Company beginning in its first quarter of 2019.
- aapl_10k_2016-10-27_98_116Other - OtherASU 2016-13 will be effective for the Company beginning in its first quarter of 2021 and early adoption is permitted.
- aapl_10k_2016-10-27_99_121Other - OtherASU 2014-09 will be effective for the Company beginning in its first quarter of 2019, and early adoption is permitted.
- aapl_10k_2016-10-27_100_125Revenue - Product2016-12, Revenue from Contracts with Customers Topic 606: Narrow-Scope Improvements and Practical Expedients ASU 2016-12 .
- aapl_10k_2016-10-27_151_209Revenue - ProductRevenue allocated to the unspecified software upgrade rights and non-software services based on the Companys ESPs is deferred and recognized on a straight-line basis over the estimated period the software upgrades and non-software services are expected to be provided.
- aapl_10k_2016-10-27_14_31Revenue - ProductTotal net sales increased in each of the Companys reportable operating segments, with particularly strong growth in Greater China where year-over-year net sales increased 84%.
- aapl_10k_2016-10-27_14_27Revenue - ProductiPhone net sales and unit sales in 2015 increased in all of the Companys reportable operating segments.
- aapl_10k_2016-10-27_126_340Financial - DividendThe following table presents the Companys dividends, dividend equivalents, share repurchases and net share settlement activity from the start of the capital return program in August 2012 through
- aapl_10k_2016-10-27_7_13Other - OtherThe Company designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players, and sells a variety of related software, services, accessories, networking solutions and third-party digital content and applications.
- aapl_10k_2016-10-27_120_153Revenue - GeographyIn addition, the Company has entered, and in the future may enter, into currency swaps to manage foreign currency risk on the Notes.
- aapl_10k_2016-10-27_63_305Revenue - ProductThe year-over-year increase in Japan net sales during 2015 was driven primarily by growth in Services largely associated with strong App Store sales, partially offset by the effect of weakness in the Japanese yen relative to the U.S. dollar.
- aapl_10k_2016-10-27_84_75Financial - IncomeThe year-over-year increase in other incomeexpense, net during 2016 and 2015 was due primarily to higher interest income, partially offset by higher interest expense on debt and higher expenses associated with foreign exchange activity.
- aapl_10k_2016-10-27_153_215Revenue - ProductThe Companys policy requires that, if refunds cannot be reliably estimated, revenue is not recognized until reliable estimates can be made or the price protection lapses.
- aapl_10k_2016-10-27_129_342Other - OtherThe Company has not entered into any transactions with unconsolidated entities whereby the Company has financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose the Company to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the Company, or engages in leasing, hedging, or R&D services with the Company.
- aapl_10k_2016-10-27_14_28Revenue - ProductThe Company also experienced year-over-year net sales increases in Mac, Services and Other Products.
- aapl_10k_2016-10-27_3_2Other - OtherForward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.
- aapl_10k_2016-10-27_156_224Revenue - ProductChanges in the fair value of available-for-sale securities impact the Companys net income only when such securities are sold or an other-than-temporary impairment is recognized.
- aapl_10k_2016-10-27_74_69Financial - EarningsGross margins could also be affected by the Companys ability to manage product quality and warranty costs effectively and to stimulate demand for certain of its products.
- aapl_10k_2016-10-27_101_127Revenue - ProductThe new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption.
- aapl_10k_2016-10-27_125_160Financial - Shares / EquityUnder the program, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.
- aapl_10k_2016-10-27_20_270Other - OtherIncludes deferrals and amortization of related software upgrade rights and non-software services.
- aapl_10k_2016-10-27_165_255Other - OtherResolution of these uncertainties in a manner inconsistent with managements expectations could have a material impact on the Companys financial condition and operating results.
- aapl_10k_2016-10-27_13_22Other - OtherIn April 2016, the Company announced a significant increase to its capital return program by raising the expected total size of the program from $200 billion to $250 billion through March 2018.
- aapl_10k_2016-10-27_15_32Other - OtherIn April 2015, the Company announced a significant increase to its capital return program by raising the expected total size of the program to $200 billion through March 2017.
- aapl_10k_2016-10-27_120_150Other - Other, the Company has outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $78.4 billion collectively the Notes .
- aapl_10k_2016-10-27_166_258Legal - OtherIn the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies for asserted legal and other claims.
- aapl_10k_2016-10-27_84_76Other - OtherThe weighted-average interest rate earned by the Company on its cash, cash equivalents and marketable securities was 1.73%, 1.49% and 1.11% in 2016, 2015 and 2014, respectively.
- aapl_10k_2016-10-27_49_291Revenue - GeographyAmericas net sales decreased during 2016 compared to 2015 due primarily to lower net sales and unit sales of iPhone.
- aapl_10k_2016-10-27_96_107Other - Other2016-02, Leases Topic 842 ASU 2016-02 , which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements.
- aapl_10k_2016-10-27_150_203Revenue - ProductFor multi-element arrangements that include hardware products containing software essential to the hardware products functionality, undelivered software elements that relate to the hardware products essential software andor undelivered non-software services, the Company allocates revenue to all deliverables based on their relative selling prices.
- aapl_10k_2016-10-27_86_322Financial - IncomeProvision for income taxes and effective tax rates for
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- Form Type: Annual
- Number of times amended: 0
- Accession Number: 0001628280-16-020309
- Submitted to the SEC: Wednesday, October 26, 2016
- Accepted by the SEC: Wednesday, October 26, 2016
- Period Ending: September 2016
Positive and negative sentiment analysis is available in these filings:
$140.64 -0.28 (-0.20%)
$140.35 to $141.74
$89.47 to $142.80
Earnings per Share:
PEG / Short / PE Ratios:
1.69 / 1.64 / 16.88
$140.35 to $141.74
$89.47 to $142.80
Earnings per Share:
PEG / Short / PE Ratios:
1.69 / 1.64 / 16.88