Apple Inc. Financial Report Card Shows Progress

On July 21, 2015, Apple Inc. announced record financial results for its third quarter ended June 27, 2015, reporting revenues of $49.6 billion for the quarter as compared to $37.4 billion reported during Q3 FY14, thereby registering a growth of close to 33% on a y-o-y basis. The Company stated that the growth was fueled by record third quarter sales of iPhone and Mac, all-time record revenue from services and the successful launch of Apple Watch. Gross margin for the quarter was reported to be 39.7%, an improvement of 30 bps over the 39.4% margin attained in Q3 FY14. Apple’s net profit for Q3 FY15 came in at $10.7 billion or about $1.85 per diluted share, as against reported net profit of $7.7 billion or $1.28 per diluted share for Q3 FY14.

The Active Charter Investors Association (“ACI Association”) has initiated research coverage on Apple Inc., with select highlights from internally released reports being made available to the general public (see below), with access to the entirety of the research available to new members. Here are the highlights of the ACI rerport.

Product Performance – Apple sold 47,534 units of its iPhones during the quarter bringing in revenues of $31.4 billion, as compared to $19.8 billion of revenues by iPhone in Q3 FY14, growing 59% on a y-o-y basis. However, on a sequential basis, iPhone sales were down by 22%, both in terms of units sold as well as revenues generated. Apple continues to experience declining sales for its iPad. For the reported quarter, Apple sold 10,931 iPads bringing in revenues of $4.5 billion, as against revenues of $5.9 billion clocked by sales of 13,276 units of iPads in Q3 FY14. The Company’s Mac grew 9% y-o-y to chalk up sales of 4,796 units generating revenues of $6.0 billion in Q3 FY15 vis–vis the 4,413 units accounting for $5.5 billion in revenues in Q3 FY14.

Regional Performance – Apple recorded $20.2 billion in revenues in the Americas during the quarter, as compared to $17.6 billion reported in Q3 FY14, growing 15% on a y-o-y basis. However, sequentially the Company saw revenues fall in this region by 5%. Europe accounted for revenues of $10.3 billion as against $8.7 billion for the previous year quarter. In the Greater China region, Apple saw revenues grow by 112% on a y-o-y basis to reach $13.2 billion for Q3 FY15, vis–vis $6.2 billion reported for Q3 FY14. With revenues of $2.9 billion in Japan, Apple saw its revenues in the region grow by 9% on a y-o-y basis. Rest of Asia pacific accounted for revenues of $2.9 billion this quarter as against $2.3 billion reported in the previous year quarter.

Management speak – Tim Cook, the CEO of Apple said that it was an amazing quarter for the Company with strong sales of Mac, all-time record revenues from services, driven by the App Store, and a great start for the Apple Watch. He added that the excitement for Apple Music has been incredible and the Company is looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall. Luca Maestri, the CFO of Apple said that the Company generated very strong operating cash flow of $15 billion. He also pointed out that the Company returned $13 billion to shareholders through its capital return program.

Guidance for the Next Quarter – Apple provided guidance for its fiscal 2015 fourth quarter. The company expects Q4 revenue between $49 billion and $51 billion; gross margin between 38.5% and 39.5%; operating expenses between $5.85 billion and $5.95 billion; other income/(expense) of $400 million; and tax rate of 26.3%.

To find out how this influences ACI’s rating on Apple Inc. read the full report in its entirety here:
http://www.aciassociation.com/?c=AAPL

ACI Association produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. ACI Association has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

ACI Association has not been compensated; directly or indirectly; for producing or publishing this material. The non-sponsored content contained in the above press release has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”). Rohit Tuli, a CFA charter holder (the “CFA”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on sound investment judgment and publicly available information which is believed to be reliable. The Reviewer and the CFA have not performed any independent investigations or forensic audits to validate the information herein. Unless otherwise noted, any content outside of this document has no association with the Author, the Reviewer, or the CFA (collectively referred to as the “Production Team”) in any way. The Production Team is compensated on a fixed monthly basis and do not hold any positions of interest in any of the securities mentioned herein.

No Warranty

ACI Association, the Author, the Reviewer and the CFA (collectively referred to as the “Publishers”) are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted by the Publishers whatsoever for any direct, indirect or consequential loss arising from the use of this document. The Publishers expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, the Publishers do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

Not An Offering

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither ACI Association nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever.

To download ACI Association report(s), read its disclosures, or for more information, visit:
http://www.aciassociation.com/

ACI Association is not available to residents of Belarus, Cuba, Canada, Iran, North Korea, Sudan, Syria or Somalia.

CFA and Chartered Financial Analyst are registered trademarks owned by CFA Institute.

Today, membership is open to readers on a complementary basis at the following URL:
http://www.aciassociation.com/?c=AAPL

Highlights from our AAPL Report include:

SOURCE: http://www.aciassociation.com