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Apple Inc.'s Earnings: Let's Talk Numbers!

By Motley Fool Staff - Feb 2, 2016 at 7:39AM

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Revenue, net income, and this other key metric tell the tale of Wall Street’s reaction to the tech giant’s most recent earnings release.

Last week, Apple (AAPL 1.38%) released year-end data that failed to live up to Wall Street's expectations.

In this video segment, Sean O'Reilly and Dylan Lewis go over the numbers for revenue, earnings, and iPhone sales; how Apple's results compared with its guidance; and why Wall Street is so unhappy about it.

A transcript follows the video.

 

This podcast was recorded on Jan. 29, 2016.

Sean O'Reilly: So, diving in. We're going to do Apple first?

Dylan Lewis: All right. Let's do Apple first.

O'Reilly: Sound good? How did they do? Big numbers.

Lewis: Big numbers. Revenue came in at $75.8 billion, within guidance but below analyst estimates.

O'Reilly: Dylan, say it with a little bit of respect. Seventy-five! I'm just kidding. It's fine.

Lewis: Earnings clocked in at $3.28 per share, beating analyst expectations of $3.23 per share. Obviously, the third big number that most people are looking at when it comes to Apple's earnings are iPhone sales.

O'Reilly: It's really the only number.

Lewis: Yeah, given that it's two-thirds of their revenue base. iPhone sales were 74.8 million units for the quarter, which was up 300,000 units over the previous year.

O'Reilly: That's not a lot. I mean... I'm not looking at a percentage, but that's not a lot (laughs).

Lewis: Yeah. You're not used to seeing increases...

O'Reilly: Hundreds of thousands. What?

Lewis: Increases of less than a million, right? And I think that was probably part of the problem, really. I just mentioned it's two-thirds of their revenue base.

O'Reilly: 300,000 is an apartment complex in China. Like... (laughs)

Lewis: (laughs) Yeah.

O'Reilly: What is this?

Lewis: A city, even. So, despite guidance that they'd laid out in the previous quarter that had said there would be segment growth, obviously, investors were a little worried coming into the report. There have been some bearish signals from Apple suppliers, notably Taiwan Semiconductor, which is something we talked about before on the show, little while back.

So, a lot of people worried about iPhone growth and what general revenue growth would look like. Those concerns are obviously somewhat valid. The company did demonstrate growth, which you like to see. It was not up to the Street's expectations, which is why you see some of the dip you've seen in the market recently.

O'Reilly: But, Dylan, they beat on earnings-per-share estimates!

Lewis: Yeah, that's kind of perennially the Apple problem. They lay out really solid guidance that at least shows some sort of growth, except for this upcoming quarter -- which is something we can get into -- but the Street always wants more.

Dylan Lewis has no position in any stocks mentioned. Sean O'Reilly has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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