All good things must come to an end, and for Apple, that means its enviable winning streak when it comes to its quarterly earnings. Apple today reported its fiscal Q2 2016 results and it represented the first time that the company has witnessed a year-over-year sales decline for its popular iPhones. Apple sold 51.2 million iPhones during the quarter compared to 61 million during the same period one year ago.
Apple generated $50.6 billion in revenue for the quarter and net income of $10.5 billion ($10.90 per diluted share). Most companies would kill for those kinds of numbers, but it was an off quarter for Apple — during the same period last year, the company pulled in $58.01 billion in revenue and $13.57 in net income. Gross margins also fell slightly from 40.8 percent a year ago to 39.4 percent during the most recently completed quarter.
And it wasn’t just iPhones that dinged Apple’s quarter; the iPad continues its losing streak despite the introduction of the iPad Pro this past fall. Sales tumbled from 12.6 million units during fiscal Q2 2015 to just 10.3 million units for fiscal Q2 2016. And Macs, which were once on an upward trajectory with regards to sales also fell from 4.6 million units down to just 4 million units.
“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Apple CEO Tim Cook. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
“We generated strong operating cash flow of $11.6 billion and returned $10 billion to shareholders through our capital return program during the March quarter,” added Apple CFO Luca Maestri. “Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion.”
Looking forward, Apple’s fiscal Q3 guidance is showing expected revenue of between $41 billion and $43 billion, and gross margin between 37.5 percent and 38 percent.