Apple Reports First Quarter Results

CUPERTINO, California—January 17, 2001—Apple® today announced financial results for its fiscal 2001 first quarter ended December 30, 2000. For the quarter, the Company posted a net loss of $195 million, or $.58 per share. These results compare to a net profit of $183 million, or $.51 per diluted share, achieved in the year ago quarter. Revenues for the quarter were $1 billion, down 57 percent from the year ago quarter, and gross margins were -2.1 percent, compared to 25.9 percent in the year ago quarter. International sales accounted for 49 percent of the quarter's revenues.

The quarter's results included a $49 million after-tax gain from the sale of 3.8 million shares of ARM Holdings plc. and 1 million shares of Akamai Technologies, Inc. The Company also adopted Statement of Financial Accounting Standards No. 133 during the quarter, resulting in an after tax gain of $12 million from the cumulative effect of the accounting change. In addition, application of SFAS No. 133 resulted in the recognition of a $9 million unrealized after-tax loss related to the Company's investment in convertible securities of Samsung Electronics Co., Ltd. Without the investment gains and losses and the effect of SFAS No. 133 adoption, the net loss for the quarter would have been $247 million, or $.73 per share.

Apple shipped 659 thousand Macintosh units during the quarter.

“We took our medicine last quarter and brought our channel inventories back down to about five and a half weeks,” said Steve Jobs, Apple's CEO. “We're starting this year with a bang — shipping our new PowerBook G4 in January, our new 733 MHz Power Mac G4 in February, and Mac OS X in March.”

“Our cash position remains very strong at over $4 billion, and we are planning a return to sustained profitability beginning this quarter,” said Fred Anderson, Apple's CFO. “We now expect revenues for FY01 to be about $6 billion.”

Apple will provide live streaming of its Q1 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. PST on Wednesday, January 17, 2001 at https://www.apple.com/quicktime/qtv/earningsq101/ 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 December 30, 2000, to be filed with the SEC.

Apple, the Apple logo, Macintosh and QuickTime are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners.