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Apple - a return to record breaking sales growth

George Salmon | 1 February 2017 | A A A
Apple - a return to record breaking sales growth

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Apple Inc Com Stk NPV

Sell: 173.18 | Buy: 173.19 | Change 1.09 (0.63%)
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Total first quarter group revenue of $78.4bn represents an increase on the $75.9bn in Q1 2016, assisted by record iPhone, Services and Mac revenues. The shares rose 3% in afterhours trading.

iPhone sales, which account for around 70% of group revenue, increased by 5% to $54.4bn following the launch of the iPhone 7. Services, which includes revenues from the app store and Apple Pay, remains the fastest growing division with revenues increasing 18% to $7.2bn.

Mac revenues were also $7.2bn, up 7%, while iPad revenue fell 22% to $5.5bn. Revenue from other products, which include Apple TVs and iPods, fell 8% to $4bn.

Net income fell to $17.9bn, reflecting a fall in profit margins. The quarterly dividend of $0.57 per share, 9.6% above last year.

Looking forwards, Apple CEO Tim Cook said he is very excited about the products in the pipeline. In Q2, revenue is expected to be between $51.5-53.5bn, around 1.8-5.7% above last year. After recording a gross profit margin of 38.5% this quarter, Apple expects a similar figure in Q2. This is, however, set to be lower than last year's 39.4%.

Unless otherwise stated, all estimated figures, including prospective dividend yields, are taken from a consensus of analyst forecasts compiled by Thomson Reuters. These estimates should not be taken as a reliable indicator of future performance.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.

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