Apple Reports Third Quarter Results

CUPERTINO, California—July 16, 2003—Apple® today announced financial resultsfor its fiscal 2003 third quarter ended June 28, 2003. For the quarter, theCompany posted a net profit of $19 million, or $.05 per diluted share. Theseresults compare to a net profit of $32 million, or $.09 per diluted share,in the year-ago quarter. Revenues for the quarter were $1.545 billion, up 8percent from the year-ago quarter and up 5 percent sequentially, and grossmargins were 27.7 percent, up from 27.4 percent in the year-ago quarter.International sales accounted for 39 percent of the quarter’s revenues.

Apple shipped 771 thousand Macintosh® units during the quarter.

“This was a great new product quarter for Apple, starting with the iTunesMusic Store and the new third-generation iPods, and ending with theannouncement of the Power Mac G5 and the developer preview of Panther, thefourth major release of Mac OS X,” said Steve Jobs, Apple’s CEO. “Customerresponse to our new products has been very strong, and this quarter we arefocused on delivering Power Mac G5s beginning in August and finishingPanther for release later this year.”

“We are very proud to have exceeded our revenue target for the third quarterdespite the difficult economic backdrop,” said Fred Anderson, Apple’s CFO.“We continue to be pleased with our working capital management and ourability to increase cash which totals over $4.5 billion. Looking ahead tothe fourth quarter of 2003, we expect an increase in revenues and a slightincrease in earnings relative to the June quarter.”

Apple will provide live streaming of its Q3 2003 financial resultsconference call utilizing QuickTime®, Apple’s standards-based technology forlive and on-demand audio and video streaming. The live webcast will begin at2:30 p.m. PDT on Wednesday, July 16, 2003 at https://102.p.syniva.es/quicktime/qtv/earningsq303/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windowsusers at 102.p.syniva.es/quicktime.

This press release contains forward-looking statements about futurerevenues, profit and products. These statements involve risks anduncertainties and actual results may differ. Potential risks anduncertainties include continued competitive pressures in the marketplace;the effect competitive and economic factors and the Company’s reaction tothem may have on consumer and business buying decisions with respect to theCompany’s products; the ability of the Company to make timely delivery ofnew programs, products and successful technological innovations to themarketplace; the continued availability of certain components and servicesessential to the Company’s business currently obtained by the Company fromsole or limited sources; possible disruption in commercial activities causedby terrorist activity and armed conflict, such as changes in logistics andsecurity arrangements and reduced end-user purchases relative toexpectations; possible disruption in commercial activity as a result ofSevere Acute Respiratory Syndrome (SARS); risks associated with theCompany’s retail initiative including significant investment cost, uncertainconsumer acceptance and potential impact on existing reseller relationships;the effect that the Company’s dependency on manufacturing and logisticsservices provided by third-parties may have on the quality or quantity ofproducts manufactured; and the ability of the Company to successfully evolveits 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 2002 andthe Company’s Form 10-Q for the quarter ended June 28, 2003 to be filed withthe SEC.

Press Contact:
Tara Hendela
Apple Canada
(905) 513-5853
[email protected]