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Post Earnings Coverage as Apple's Reported Y-o-Y Growth in Q2 Results; Outperformed Projections

Upcoming AWS Coverage on Universal Electronics Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 15, 2017 / Active Wall St. announces its post-earnings coverage on Apple Inc. (NASDAQ: AAPL). The company announced its financial results for the second quarter fiscal 2017 (Q2 FY17) on May 02, 2017. The Cupertino, California-based Company's quarterly revenues and earnings per diluted share grew on a year-over-year basis, beating market consensus estimates. Register with us now for your free membership at:

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One of Apple's competitors within the Electronic Equipment space, Universal Electronics Inc. (NASDAQ: UEIC), reported its Q1 2017 earnings results on Thursday, May 04, 2017. AWS will be initiating a research report on Universal Electronics in the coming days.

Today, AWS is promoting its earnings coverage on AAPL; touching on UEIC. Get our free coverage by signing up to:

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Earnings Reviewed

In Q2 FY17, Apple reported total net sales of $52.90 billion compared to $50.56 billion recorded at the end of Q2 FY16. Net sales numbers for the reported quarter outperformed market expectations of $52.6 billion.

The iPhone maker reported Q2 FY17 net income of $11.03 billion, or $2.10 per diluted share, versus $10.52 billion, or $1.90 per diluted share, in Q2 FY16. The Company's diluted earnings per share also outperformed market earnings estimates of $2.02 per diluted share.

Operating Metrics

For the three months ended on April 01, 2017, the Company posted gross margin of $20.59 billion, or 38.9% of net sales, compared to $19.92 billion, or 39.4% of net sales, in the prior year's same quarter. The Company's operating expenses increased during Q2 FY17 to $6.49 billion, or 12% of net sales, from $5.93 billion, or 12% of net sales, in the previous year's same quarter. Furthermore, the Company's operating income for Q2 FY17 came in at $14.10 billion versus $13.99 billion in Q2 FY16.

Segment Performance

During Q2 FY17, iPhone unit sales were 50.76 million, down marginally from 51.19 million. However, the Company generated total revenues of $33.25 billion from iPhone sales, which came in above $32.86 billion reported in the year ago comparable quarter. Furthermore, iPhone sales contributed 63% to total revenue in Q2 FY17 compared to 65% in Q2 FY16.

Apple sold 8.92 million units of iPad in Q2 FY17, declining 13% y-o-y. Moreover, the segment's revenues declined 12% y-o-y to $3.89 billion in Q2 FY17. Mac unit sales improved 4% y-o-y to 4.20 million in Q2 FY17 from 4.03 million in Q2 FY16. Additionally, the segment's revenues grew 14% y-o-y in Q2 FY17 to $5.84 billion.

In Q2 FY17, revenues from Services segment surged 18% y-o-y to nearly $7.04 billion. Furthermore, in the reported quarter, revenues from Other products surged 31% y-o-y to $2.87 billion.

Geographical Contribution

In Q2 FY16, Apple registered sales growth in all the geographical segments, except Greater China. Moreover, the Company generated 65% of its quarterly revenue from international market.

In Q2 FY17, Apple's sales in Americas, the largest market for the Company, generated revenues of approximately $21.16 billion, or 40% of net sales, compared to $19.10 billion, or 38% of net sales, in Q2 FY16.

Apple's revenues from the European region grew 10% y-o-y to $12.73 billion in Q2 FY17. The Company generated $4.49 billion of sales revenues from Japan in Q2 FY17 which was 5% above $4.28 billion recorded in the last year's same quarter. Meanwhile, revenues from the rest of Asia/Pacific region surged 20% to $3.80 billion in Q2 FY17 from $3.16 billion reported in Q2 FY16.

However, in the reported quarter, revenues from Greater China region declined 14% y-o-y to $10.73 billion, primarily due to lower net sales of iPhone and weak foreign currency translation.

Cash Flow & Balance Sheet

For the six months ended on April 01, 2017, Apple generated $39.58 billion in cash from operations compared to $39.06 billion at the end of quarter in the year ago same period. The Company had cash and cash equivalents balance of $15.16 billion as on April 01, 2017, compared to $20.48 billion, at the close of books on September 24, 2016.

Dividend and Share Repurchases

In its earnings press release, Apple's Board of Directors hiked the quarterly dividend by 10.5% to $0.63 per share of the common stock. The dividend is payable on May 18, 2017, to shareholders of record as of the close of business on May 15, 2017.

Furthermore, the Company also announced that its Board of Directors has authorized an increase of $50 billion to the Company's program to return capital to shareholders and is extending the program timeframe by four quarters. Under the expanded program, the Company intends to spend a cumulative total of $300 billion by the end of March 2019.

Outlook

In its guidance for Q3 FY17, Apple expects revenue to be in the range of $43.5 billion and $45.5 billion. The Company anticipates gross margin for Q3 FY17 to be between 37.5% and 38.5%. Furthermore, the management forecasts operating expenses for Q3 FY17 in between $6.6 billion and $6.7 billion.

Stock Performance

On Friday, May 12, 2017, the stock closed the trading session at $156.10, rising 1.40% from its previous closing price of $153.95. A total volume of 32.43 million shares have exchanged hands, which was higher than the 3-month average volume of 24.49 million shares. Apple's stock price surged 18.64% in the last three months, 41.98% in the past six months, and 76.10% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have soared 35.92%. The stock is trading at a PE ratio of 18.26 and has a dividend yield of 1.61%.

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