Apple Reports Fourth Quarter Results

Apple today announced financial results for its fiscal 2004 fourth quarter which ended on September 25th, 2004. For the quarter, the Company posted a net profit of US$106 million (£58.8m*), or $0.26 per diluted share. These results compare to a net profit of US$44 million, or $0.12 per diluted share, in the year-ago quarter. Revenue for the quarter was US$2.35 billion (£1.3bn*), up 37 percent from the year-ago quarter. Gross margin was 27 percent, up from 26.6 percent in the year-ago quarter. International sales accounted for 37 percent of the quarter's revenue.

The quarter's results include an after-tax restructuring charge of US$4 million (£2.2m*). Excluding this charge, the Company's net profit for the quarter would have been US$110 million (£61.1m*), or $0.27 per diluted share.

Apple shipped 836,000 Macintosh units and 2,016,000 iPods during the quarter, representing a 6 percent increase in CPU units and a 500 percent increase in iPods over the year-ago quarter.

“We are thrilled to report our highest fourth quarter revenue in nine years”, said Steve Jobs, Apple's CEO. “We shipped over 2 million iPods, our Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has received phenomenal reviews and is off to a great start”.

“We're pleased to report 37 percent revenue growth for the quarter and operating margin above 5 percent”, said Peter Oppenheimer, Apple's CFO. “Looking ahead to the first quarter of fiscal 2005, we expect revenue of between US$2.8 and US$2.9 billion, operating margin above 7 percent and earnings per diluted share of $0.39 to $0.42”.

For the year, the Company reported net income of US$276 million (£153.3m*) on revenue of US$8.28 billion (£4.6bn*) compared to net income of US$69 million on revenue of US$6.21 billion in 2003.

Non-GAAP Measures
The Company believes that presentation of results excluding items such as restructuring charges and investment gains provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company includes a full income statement reconciliation of these non-GAAP measures to provide a more complete view of their effect on results.

This press release contains forward-looking statements about the Company's estimated revenue and earnings for the first quarter of fiscal 2005. 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 programmes, 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, including the timely resolution of manufacturing issues associated with the G5 microprocessors used in many of the Company's Macintosh systems; 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; possible disruption in commercial activity as a result of major health concerns including epidemics; 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, quantity or cost of products manufactured or services rendered; 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. 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 Forms 10-Q for the quarters ended December 27th, 2003, March 27th, 2004 and June 26th, 2004; and the Company's Form 10-K for the 2004 fiscal year to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Press Contacts:
Apple UK and Ireland Public Relations
Email: [email protected]
Phone: +44 (0)20 8218 1440