Apple’s 4th quarter report gets mixed interpretations

Apple Inc. (AAPL) recently posted the financial results for its fiscal 2016 fourth quarter which ended in September.

The company reported an increase in its services revenue by 24%. “Our strong September quarter results cap a very successful fiscal 2016 for Apple. We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24% to set another all-time record,”  said Apple CEO Tim Cook.

Apple announced revenues of $46.9 billion with quarterly net income of $9 billion, or $1.67 earnings-per-share. These results show a decline compared to the results of the comparable quarter last year which showed revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share.

Although direct reports from the Apple Newsroom itself and other sources gave positive views on the quarterly report, several other reports from analysts have given mixed interpretations regarding the matter.

According to regular observations, the company has experienced a straight quarterly decline for the past months since its iPhone 7 release in revenue and earnings due to decrease in sales on the company’s second-largest market, China compared to last year’s reports of consistent  revenue increase of 28%. However, Apple has provided an optimistic guidance for the upcoming year’s first quarter which includes an increase in revenue between $76 billion to $78 billion. The report also included an expected increase in gross margin from the current 38% to a consistent percentage between 38 and 38.5 with operating expenses between $6.9 billion and $7 billion. This will also include other income/expense of $400 million with tax rate of 26%.

Regardless of the decrease in demand from China, Apple’s stock has risen to almost 20% in the past months based from NASDAQ’s high bullish ratings. Moreover, it was expected by Piper Jaffray analyst Gene Munster that Apple shares are to move higher as the company approaches its iPhone’s 10^th anniversary release in the fall of next year.

On the other hand, Apple investors expected that the new iPhone will take advantage of Samsung’s current crisis of its faulty Samsung Galaxy Note 7 which was reported several times to overheat and explode.  According to reports, Apple has increased its orders for the iPhone 7 in response to Samsung’s disaster.

Despite various mixed reviews and feedbacks on Apple’s latest quarterly report, majority of analysts and Apple Inc. itself stay positive for the upcoming year with consistent or increased sales and shares.

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