Apple Reports First Quarter Results

Apple today announced financial results for its fiscal 2004 first quarter, which ended on December 27th, 2003. For the quarter, the Company posted a net profit of US$63 million (£34.5m*) or $0.17 per diluted share. These results compare to a net loss of US$8 million, or $0.02 per diluted share, in the year-ago quarter. Revenue for the quarter reached a four-year high of US$2.006 billion (£1.1bn*), up 36 percent from the year-ago quarter. Gross margin was 26.7 percent, down from 27.6 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.

The quarter’s results include an after-tax investment gain of US$3 million (£1.65m*) which increased earnings per diluted share by $0.01.

Apple shipped 829,000 Macintosh units during the quarter, up 12 percentfrom the year-ago quarter, as well as 733,000 iPod units, up 235percent from the year-ago quarter.

“It was an outstanding quarter for Apple, with double-digit unit and revenue growth and over 730,000 iPods sold”, said Steve Jobs, Apple’s CEO. “We’re kicking off 2004 with strong momentum, especially for Mac OS X, which is now used by almost 40 percent of our installed base, iPod and the iTunes Music Store, which has a 70 percent share of the legal music download market”.

“We are very pleased to have exceeded our revenue and profit targets for the first quarter”, said Fred Anderson, Apple’s CFO. “Continued strong asset management enabled us to increase cash by $225 million to just under $4.8 billion. Looking ahead to the second quarter of fiscal 2004, we expect our third consecutive quarter of year-over-year double-digit growth in both revenue and earnings, with revenue of about $1.8 billion and earnings perdiluted share of $0.08 to $0.10”.

Consolidated financial statements and a data summary for the quarter may bedownloaded from https://www.apple.com/pr/library/2004/jan/14results.html.

This press release contains forward-looking statements about the Company’sestimated revenue and earnings for the second quarter of fiscal 2004. Thesestatements involve risks and uncertainties and actual results may differ.Potential risks and uncertainties include continued competitive pressures inthe marketplace; the effect competitive and economic factors and theCompany’s reaction to them may have on consumer and business buyingdecisions with respect to the Company’s products; the ability of the Company to make timely delivery of new programmes, products and successfultechnological innovations to the marketplace; the continued availability ofcertain components and services essential to the Company’s businesscurrently obtained by the Company from sole or limited sources; possibledisruption in commercial activities caused by terrorist activity and armedconflict, such as changes in logistics and security arrangements, andreduced end-user purchases relative to expectations; possible disruption incommercial activity as a result of major health concerns, such as SevereAcute Respiratory Syndrome (SARS); risks associated with the Company’sretail initiative including significant investment cost, uncertain consumeracceptance and potential impact on existing reseller relationships; theeffect that the Company’s dependency on manufacturing and logistics services provided by third-parties may have on the quality or quantity of products manufactured; the Company’s reliance on the availability of third-party music content; and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. Moreinformation on potential factors that could affect the Company’s financialresults is included from time to time in the Company’s public reports filedwith the SEC, including the Company’s Form 10-K for the fiscal year endedSeptember 27th, 2003 and the Company’s Form 10-Q for the quarter endedDecember 27th, 2003. The Company assumes no obligation to update anyforward-looking statements or information, which speak as of theirrespective dates.

* Figures based on currency exchange rates at the time of going to press; exchange rates are subject to fluctuation.

 

Press Contacts:
Apple UK and Ireland Public Relations
Email: media.uk@apple.com
Phone: +44 (0)20 8218 1440