Apple Press Info

Apple Reports Third Quarter Profit of $61 Million

CUPERTINO, California—July 17, 2001—Apple® today announced financial results for its fiscal 2001 third quarter ended June 30, 2001. For the quarter, the Company posted a net profit of $61 million, or $.17 per diluted share. These results compare to a net profit of $200 million, or $.55 per diluted share, achieved in the year ago quarter. Revenues for the quarter were $1.475 billion, down 19 percent from the year ago quarter, and gross margins were 29.4 percent, compared to 29.8 percent in the year ago quarter. International sales accounted for 44 percent of the quarter’s revenues.

The quarter’s results included a $7 million favorable after-tax impact resulting from net equity investment gains, offset by an after-tax charge of $7 million related to the purchase of in-process research and development associated with the acquisition of PowerSchool, Inc. These non-recurring items had a net neutral impact on the reported results.

Apple shipped 827 thousand Macintosh® units during the quarter.

“We had a great education quarter, with significant year over year growth, and a great iBook quarter, shipping over 182,000 of our new wildly popular consumer and education notebooks,” said Steve Jobs, Apple’s CEO. “Perhaps the most strategic event of the quarter was the launching of Apple Retail Stores, with the very successful openings of our first two stores, and plans to open 23 more in 2001.”

“We’re delivering solid profitability while maintaining lean channel inventories in a weak economic environment,” said Fred Anderson, Apple’s CFO. “Our balance sheet remains very strong, with over $4.2 billion in cash, and we are targeting a slight sequential increase in revenues and earnings per share in the September quarter.”

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Apple will provide live streaming of its Q3 2001 financial results conference call utilizing QuickTime™, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2 p.m. PDT on Tuesday, July 17, 2001 at http://www.apple.com/quicktime/qtv/earningsq301/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.

Except for the historical information contained herein, the statements in this press release are forward-looking statements that involve risks and uncertainties. Potential risks and uncertainties include, without limitation, continued competitive pressures in the marketplace; the effect competitive and economic factors and the Company’s reaction to them may have on consumer and business buying decisions with respect to the Company’s products; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the continued availability of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources and the ability of the Company to successfully evolve its operating system. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the 2000 fiscal year, and the Company’s Form 10-Q for the quarter ended June 30, 2001, to be filed with the SEC.

Press Contacts:
Lynn Fox
(408) 974-6209
lfox@apple.com

Investor Relations Contacts:
Nancy Paxton
(408) 974-5420
paxton1@apple.com
Joan Hoover
(408) 974-4570
hoover1@apple.com

Apple, the Apple logo, Macintosh, Mac OS, iBook, iMac, PowerBook, Power Mac and QuickTime are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Media Helpline (408) 974-2042