Apple Earnings Soar With China Revenue Growing 99 Percent

arpleApple reported 4th quarter earnings results yesterday after the closing bell that soared past estimates with revenue growing 28 percent and profits rising 31 percent for the quarter but Apple shares were mostly flat in afterhours trading as investors paused to assess whether Apple can sustain the same level of robust growth.

Apple’s iPhone accounts for two-thirds of Apple’s revenues and remains an important product category for Apple’s overall profits for the Cupertino, California company.

During the 4th quarter of 2015 Apple sold 48.046 million iPhone units, up 22 percent from 39,272 million units  in the 4th quarter of last year but slightly below the consensus forecast of 48.72 million units.

Apple released and took orders for their newest iPhone, the iPhone 6S and iPhone 6S Plus at the end of the 4th quarter.

Q1 2016 will mark the first quarter that the newest iPhone 6S and iPhone 6S Plus lineup is fully available and represented in Apple’s earnings report.

The iPhone 6S and iPhone 6S Plus is the same screen size as the iPhone 6 and iPhone 6 Plus. There won’t be  a dramatic hardware size upgrade this time around compared to last year when the iPhone 6 screen size grew noticeably larger from the iPhone 5 lineup.

Apple CEO Tim remains optimistic about Apple’s products heading into the holiday quarter.

“We are heading into the holidays with our strongest product lineup yet, including iPhone 6s and iPhone 6s Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV which begins shipping this week.” said Apple CEO Tim Cook.

Apple saw strong growth in China with their revenue growing 99 percent in the 4th quarter to $12,518 billion, up from 6,292 billion in the same quarter last year.

Apple’s iPhone 6 are growing in popularity in China where the middle class is becoming larger and rapid 4G adoption is occurring.

Apple’s iPad sales continues to weaken and declined 20 percent with 9,883 million units sold in Q4 2015 compared to 12, 316 million units in the same quarter last year.

Mac sales grew slightly to 5,709 million units, up from 5.520 million units in the same quarter last year.

Other products category which covers the Apple Watch and Beats, increased 61 percent year over year to $3.05 billion in revenue during Q2015, up from $ 1,896 billion in the same quarter last year.

For the quarter, Apple’s quarterly revenue grew to 51.5 billion and net income rose to $11.1 billion or $1.96 per share, up from $8.5 billion or $1.42 per share in the same quarter a year ago.

Analysts on average were expecting a profit of $1.88 per share on revenue of $51.11 billion.

“Apple’s record September quarter results drove earnings per share growth of 38 percent and operating cash flow of $13.5 billion,” said Luca Maestri, Apple’s CFO at the conference call.

“We returned $17 billion to our investors during the quarter through share repurchases and dividends, and we have now completed over $143 billion of our $200 billion capital return program” Maestri added.

-Johnathan Schweitzer

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