Apple’s Q2 earnings were released today. Analysts have largely predicted that Apple would experience its first loss in revenue since 2003.
In its second fiscal quarter, Apple just barely missed its revenue target having reported $50.6 billion USD in revenue year-over-year with 51.2 million iPhones sold. Since iPhones contribute approximately two-thirds of Apple’s revenue, the drop in iPhone sales likely contributed to the company’s overall loss.
Last year, during this quarter, Apple reported $58 billion USD in revenue, whereas this time around investors had been forewarned to expect sales between $50 and $53 billion. Last year at this time the company reported 61.1 million iPhones sold.
This quarter also reported a total of 10.2 million iPads and 4 million MacBooks sold. These numbers also fall short in comparison to last year’s sales of 12.6 million iPads and 4.1 Macbooks.
From January to March, the company reported a profit of $10.5 billion USD, or $1.90 per diluted share. This number is down from $13.6 billion USD, or $2.33 per diluted share the year before. This quarter’s gross margin was totalled at 39.4 percent compared to a rate of 40.8 percent in 2015’s second fiscal quarter.
In response to these losses, Apple’s CEO Tim Cook said in a statement that, “Our team executed extremely well in the face of strong macroeconomic headwinds. We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
More specific Apple watch numbers haven’t been released but the report does include an “Other” section which includes the Apple Watch and it’s grown every quarter since its first release.
A Reuters report states that after years of record-breaking sales, investors are concerned that the iPhone may have finally reached a point of saturation. The sales of the iPhone SE are not reflected in this quarterly report, as it was released after the end of the company’s second quarter.
Apple predicts that their third-quarter revenue will fall between $41 and $43 billion USD with a gross margin falling between 37.5 and 38 percent.
Update: During the investor conference call, CEO Tim Cook stated the company 13 million Apple Music subscribers who pay $9.99 per month, which is an increase of 2 million from February.
Source: Apple Inc.