Apple Just Lopped Off $1 Billion In Spending

Apple Capital Expenditure Cuts

Apple Inc. on Wednesday said it will cut its capital-spending projection for the fiscal year by 8%. The company plans to reduce $1 billion in spending for the purchasing of manufacturing equipment, building data centers and retail stores.

The company also says it will spend $12 billion on capital expenditures for the year ending in September, according to a regulatory filing for Q3 2015. The company had originally predicted $13 billion spending.

A company spokeswoman said Apple lowered the forecast because it was able to spend more efficiently for tooling equipment and facilities. “There are no changes in our product plans,” she said.

The company operates by developing specialized manufacturing equipment and then leasing its tools to suppliers who produce Apple products.

The company announced its reduction in capital-spending expenditures one day after announcing a 38% increase in profits for the third fiscal quarter.

Apple’s shares dropped 4.2% to $125.22 on Wednesday following disappointing iPhone sales.

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It should be noted that Apple’s capital spending can fluctuate based on the timing of new products or the business conditions of partner companies.

During the last fiscal year Apple said it would spend $11 billion on capital expenditures. In the prior year, the company predicted $10 billion and spent just $7 billion.

Apple has spent more on its physical operations in recent years, focusing on large data centers which are needed to power the App Store, iTunes, and iCloud services, among other software offerings.

The company is also busily building its new corporate headquarters near its current offices in Cupertino, Calif.

Apple plans to have 40 stores in China by the middle of next year. The company currently operates 22 stores in China.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at or (929) 265-0240.