Apple Reports Fourth Quarter Results
CUPERTINO, California—October 16, 2002—Apple® today announced financial results for its fiscal 2002 fourth quarter ended September 28, 2002. For the quarter, the Company posted a net loss of $45 million, or $.13 per share. These results compare to a net profit of $66 million, or $.19 per diluted share, in the year-ago quarter. Revenues for the quarter were $1.44 billion, flat with the year ago quarter, and gross margins were 26.4 percent, down from 30.1 percent in the year-ago quarter. International sales accounted for 35 percent of the quarter’s revenues.
The quarter’s results included several non-recurring items: the write-down of certain equity investments totaling $49 million net of tax; a restructuring charge of $4 million net of tax; an in-process R&D charge of $1 million net of tax; and the reversal of a portion of a previous executive compensation expense resulting in a favorable impact of $2 million. Excluding these non-recurring items, the Company’s net profit for the quarter would have been $7 million, or $.02 per share.
Apple shipped 734 thousand Macintosh® units during the quarter, down 14 percent from the year-ago quarter.
“Though our industry continues to struggle, we had some bright spots this quarter—Mac OS X v10.2 Jaguar is a big hit and on track to have 5 million users by the end of this year, our ‘Switchers’ campaign is very well received and is attracting a lot of new customers, and our retail stores sold over $100 million and hosted 2.25 million visitors this quarter,” said Steve Jobs, Apple’s CEO. “Looking forward, we do not expect our industry to pick up anytime soon, though we’re hoping to help put a lot of iPods, iMacs and iBooks under trees this holiday season. With the stability of our rock-solid balance sheet, Apple will continue to invest through this downturn to create the industry’s most innovative products and best buying experience.”
“We were extremely pleased with our ability to achieve our revenue target for the fourth quarter while reducing channel inventory to a normal level,” said Fred Anderson, Apple’s CFO. “Continued strong asset management enabled us to maintain a solid balance sheet with over $4.3 billion in cash. Looking ahead to the first quarter of 2003, we expect revenue to be up slightly from the September quarter, and expect a slight profit for the quarter before non-recurring items.”
For the year, the Company reported net earnings of $65 million on revenues of $5.74 billion, compared to a net loss of $25 million on revenues of $5.36 billion in 2001.
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 Q4 2002 financial results conference call utilizing QuickTime® 6, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PT on Wednesday, October 16, 2002 at http://www.apple.com/quicktime/qtv/earningsq402/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
This press release contains forward-looking statements about future revenues and profit. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include 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; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; risks associated with the Company’s retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; the effect that the Company’s dependency on manufacturing and logistics services provided by third-parties may have on the quality or quantity of products manufactured; and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. 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-Q for the quarter ended June 29, 2002, and the Company’s Form 10-K for the 2002 fiscal year to be filed with the SEC.
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