Apple Loses $5B due to FX

Photo: http://etfdailynews.com/

Photo: http://etfdailynews.com/

In Q1 of 2016 Apple reported an all-time high profit of $18.4 billion and at the same time an all-time high loss of $5 billion due to foreign exchange headwinds and a strong dollar as compared to other countries.

“For perspective, that difference is the size of an average Fortune 500 company,” said Apple CEO Tim Cook. If currency was held constant, the company's total revenues would have been nearly $81 billion.

Apple showcases a page of it's Q1 2016 balance sheet to show details of how its revenues were impacted across various markets. The most significant hits were Europe, China and Asia Pacific (excluding Japan) with declines of 18%, 17% and 19% respectively. Despite a "softness" in China's market, Cook still intends to invest in the country stating: "We remain very bullish on China and don’t subscribe to the doom and gloom there.” India was another country with FX currency issues for Apple, but the tech giant is still taking aim at high-growth markets like India for the future.

Apples response to the negative foreign exchange effects is to increase the price of apple products to offset the FX loss , despite the fact that higher prices will inevitably affect demand and, of course, overall sales.