Saturday, January 23, 2016

Apple Earnings 2016 Quarter 1

On Tuesday at 4:00 PM CST, Apple will announce their 2016 quarter 1 earnings. Why am I dedicated a whole post to Apple earnings?

  1. I think most people have heard of Apple and their products.
  2. Their product line and product mix isn't enormous. It's straightforward how they make money from these products. If you ask me how General Electric makes money, I couldn't tell you.
  3. There's always hype and buzz around Apple.
  4. It seems fitting since I watched the latest Steve Jobs movie tonight. 
The earnings estimate for 2016 quarter 1 is $3.23/share. So this is written as "earnings per share, earnings/share". Comparing this to the 2015 quarter 1, Apple made $3.06/share.

Apple 2015 Quarter 1 Earnings Per Share
Net Income$18,024,000,000
Shares5,881,803,000
Earnings/Share$3.06

Yes, that is "Net Income" of ~18 BILLION dollars.  

The earnings per share is estimated to be higher for 2016 quarter 1 compared to last year's 2015 quarter 1. Mathematically, the equation is "Earnings/Share = Net Income / Shares". There are a few things that make earning per share higher. 

  1. Net Income goes up. This occurs from higher revenue, fewer expenses, or both.
  2. The number of shares goes down. This occurs when Apple buys back Apple stock.
  3. Both of these things.

Below is a table of the revenue for the 2015 quarter 1 for Apple. You can see that the iPhone was 68.6% of Apple's total revenue.

Apple 2015 Quarter 1
ProductRevenue%
iPhone$51,182,000,00068.6%
iPad$8,985,000,00012.0%
Mac$6,944,000,0009.3%
Apple Services$4,799,000,0006.4%
Other$2,689,000,0003.6%
$74,599,000,000100.0%

It will be interesting to compare what products make up what percentage of revenue for 2016 quarter 1. 

I currently have 13.276 shares of Apple in my other stock brokerage account (This stock brokerage account charges $9.99 per trade). I would like to sell these shares and bring that money over to my Robinhood account that charges $0.00 per trade. 

The few times I've listened to earnings reports, I usually don't know what the numbers mean. I'm hoping by doing some research on Apple, I'll understand a few numbers on Tuesday during the earnings call. I am hoping that Apple will announce a $0.52 dividend during the call. 

Full Disclosure: I own Apple Stock. I am not a licensed financial advisor. 

Signed,

Mitch




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