Apple Reports Third Quarter Profit of $200 Million

CUPERTINO, California—July 18, 2000—Apple® today announced financial results for its fiscal 2000 third quarter ending July 1, 2000. For the quarter, the Company posted a net profit of $200 million, or $.55 per diluted share. These results compare to a net profit of $203 million, or $.60 per diluted share, achieved in the year-ago quarter. Revenues for the quarter were $1.825 billion, up 17 percent from the year-ago quarter, and gross margins were 29.8 percent, up from 27.4 percent in the year-ago quarter. International sales accounted for 46 percent of the quarter's revenues.

The quarter's results included a $37 million after-tax gain from the sale of 4.95 million shares of ARM Holdings plc., which contributed $.10 to earnings per diluted share. Excluding investment gains, the Company's net profit would have been $163 million, an increase of 43 percent from the year-ago quarter, and earnings per diluted share would have been $.45, up 29 percent from the year-ago quarter.

Sales of 1,016,000 units during the quarter including over 350 thousand Power Mac™ G4 systems and nearly 450 thousand iMac™ systems drove unit growth of 12 percent.

“We're pleased to report our eleventh consecutive profitable quarter, with net profits up 43 percent,” said Steve Jobs, Apple's CEO. “We've now shipped 3.7 million iMacs since introduction, and we had a strong quarter for our pro products, especially PowerBooks.”

“Strong earnings combined with superb asset management resulted in positive cash flows from operations of $234 million,” said Fred Anderson, Apple's CFO. “Apple finished the quarter with $3.8 billion in cash and short-term investments.”

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 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 1999 fiscal year, and the Company's Form 10-Q for the quarter ended July 1, 2000, to be filed with the SEC.

Press Contact:
Tamara Weil-Hearon
Apple
(408) 974-7403
tamarawh@apple.com

Investor Relations Contacts:
Nancy Paxton
Apple
(408) 974-5420
paxton1@apple.com

Joan Hoover
Apple
(408) 974-4570
hoover1@apple.com