Although slowing iPhone growth began to impact Apple’s bottom lin 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 26th April. It will announce its latest financial results covering the first quarter of 2016, including initial indicators as to reception for the iPhone SE and new iPad Pro.