Although slowing iPhone growth began to impact Apple’s bottom line numbers in the last quarter of the year, the company dominated Silicon Valley in 2015 as far as finances are concerned. In a survey of public tech companies in the Valley, total profit was $133 billion. Apple, alone, recorded profit of $53.7 billion dollars, responsible for 40% of the entire profit pool. The data was collected by SiliconValley.com.
Apple also ranked no. 1 by far in revenue, taking $234 billion in sales. Trailing far behind, the next closest was Alphabet (Google), at $74 billion …
Apple’s 23% profit margin is also staggering given its scale, although both Google and Intel (#2 and #3 by revenue) also recorded a respectable 21% margin. Apple also topped the chart for profit growth, increasing its bottom line by $9.3 billion over the previous year.
Apple’s >$200 billion cash pile also puts it at the top of the list for the balance sheet rankings; Apple increased its cash and investments portfolio by 16% in 2015. The closest runner up is Alphabet, with $78 billion in cash.
Despite its inordinate profit and available cash, Apple’s capital return program means that the company also tops the list of highest debt levels too. Apple’s debt stands at $64.4 billion, increasing 70% over the previous year. As much of Apple’s cash is held internationally, it uses debt to fund stock buybacks and investor dividends at far lower interest rates than if it repatriated its cash from overseas.
Investors, of course, are not interested in looking back. Across the board, Apple’s profit and sales are expected to stay flat or decline slightly in 2016, primarily due to drastically slowing iPhone sales. Analyst KGI believes iPhone sales could fall to levels lower than 2014 in the worst case, as current expectations for iPhone 7 do not seem to yield compelling features that would entice upgrades. It is currently expected that the iPhone after the iPhone 7 (i.e. whatever is released in 2017) will be Apple’s next major design overhaul for its flagship smartphone, rumored to feature an all-glass design.
Apple’s next earnings call is set for tomorrow, Tuesday April 26th. It will announce its latest financial results covering the first quarter of 2016, including initial indicators as to reception for the 4-inch iPhone SE and new 9.7-inch iPad Pro.
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Amazing how blind Wall St. can be, then. Oh well, they can suck Google’s tit for all I care.
PS “…drastically slowing iPhone sales” LMAO #1stWorldProblem
This just proves people are ok to pay more for quality.
‘xcept for people who have no taste.
Or, who think Apple is “un-American” for not rushing to circumvent their iPhone security for the FBI.
Good point!
@89p13
AKA, trump supporters.
You mean Donald “I’ll make Apple make their products in the USA” Trump? ;)
YMMV
Of course, if you don’t pay taxes it’s easy to be rich!
“…as current expectations for iPhone 7 do not seem to yield compelling features that would entice upgrades.” Show me a single example where this same thing wasn’t said about “the next iPhone” by analysts .
Silly metrics. Wall Street won’t be impressed by that.
1) is growth in china meeting expectations.
2) is the iphone resuming growth after the last quarter stall.
3) is the ipad ending the freefall they were after post-pc trends never materialized.
Given Apple didn’t get in the race to the cloud computing future, didn’t get in the race for the social networking future, and didn’t get in the race for software as a service, all they have to answer for is device sales. And they are either metting targets or not, and those targets are not set by silicon valley but by prior apple quarters and market growth. So put up, or shut up.
Apple is toast. Apple is expected to sell more and more iPhones every year even if the global economy is a mess and that’s absurd. Apple hasn’t laid off any employees or closed any stores, but that’s not good enough. Wall Street always enjoys praising companies with lots of employee layoffs because that usually means more money to investors.
I expect Apple share price to tank on earnings but I’m really going to hate to listen to Tim Cook laughing and saying how great Apple is doing as the share price drops below $100 from all the panic selling. Tim Cook needs to appear somber and say he needs to stop the bleeding and give some sure-fire way of turning things around for shareholders. Nobody wants Apple stock because they know they’re going to lose their money while Apple stockpiles a mountain of cash. The hedge fund monkeys can’t wait for their big banana payoffs. They need it now, so they’re going to buy Facebook, Amazon, Alphabet and Tesla for some quick and guaranteed returns. It’s no mystery Tim Cook and Apple are only good for share gain losses. Two years in a row for no share price gains and a compressing P/E for a company with Apple’s profitability is a despicable crime.
Almost every top tech company on the planet has a P/E at least 3X Apple’s. Hey, Cook, what’s wrong with this picture. There’s cheap and then there’s CHEAP, CHEAP, CHEAP Apple. Wall Street is screaming, “Hey, investors, Apple doesn’t have a future!” Investors happily pay nearly 40X earnings for Microsoft stock than they would for 11X earnings of Apple stock. That’s a hard slap in the face to all Apple shareholders. I don’t even want to talk about Facebook. Facebook is valued so far above Apple by investors it’s just insane. Where is Facebook making all its revenue from to be so highly prized?