Apple Reports First Quarter Results

Apple today announced financial results for its fiscal 2003 first quarter ended December 28th, 2002. For the quarter, the Company posted a net loss of US$8 million (£5m*), or $0.02 per share. These results compare to a net profit of US$38 million (£23.7m*), or $0.11 per diluted share, in the year-ago quarter. Revenues for the quarter were US$1.47 billion (£916.5m*), up 7 percent from the year-ago quarter, and gross margins were 27.6 percent, down from 30.7 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenues.

The quarter’s results included a US$17 million (£10.6m*) after-tax restructuring charge and a US$2 million (£1.25m*) after-tax accounting transition adjustment. Excluding these non-recurring items, the Company’s net profit for the quarter would have been US$11 million (£6.9m*), or $0.03 per share.

Apple shipped 743,000 Macintosh units during the quarter, about evenwith the year-ago quarter.

“We have a very strong new product pipeline for 2003, which we kicked off by introducing the two most advanced notebook computers in the industry lastweek at Macworld”, said Steve Jobs, Apple’s CEO. “We’re going to keep investing through this downturn and continue to move our products and distribution channels ever further ahead of our competitors, so that whenthe economy rebounds we will be positioned for growth”.

“We were extremely pleased with our ability to achieve our revenue targetfor the first quarter while reducing channel inventories by 11 percentwithin the quarter”, said Fred Anderson, Apple’s CFO. “Continued strong asset management enabled us to increase cash to over US$4.4 billion. Looking ahead to the second quarter of 2003, we expect revenue to be relatively flat with the December quarter, and expect a slight profit for the quarter”.

This press release contains forward-looking statements about futurerevenues, profit, products and research and development. These statementsinvolve risks and uncertainties and actual results may differ. Potentialrisks and uncertainties include continued competitive pressures in themarketplace; the effect competitive and economic factors and the Company’sreaction to them may have on consumer and business buying decisions withrespect 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 theCompany from sole or limited sources; possible disruption in commercialactivities caused by terrorist activity and armed conflict, such as changesin logistics and security arrangements, and reduced end-user purchasesrelative to expectations; risks associated with the Company’s retailinitiative 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; and the ability of the Company to successfully evolve itsoperating 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 and the Company’s Form 10-Q for the quarter ended December 28th, 2002, to be filed with the SEC.

Apple ignited the personal computer revolution in the 1970s with the AppleII and reinvented the personal computer in the 1980s with the Macintosh.Apple is committed to bringing the best personal computing experience tostudents, educators, creative professionals and consumers around the worldthrough its innovative hardware, software and Internet offerings.

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

 

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Apple UK and Ireland Public Relations
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Phone: (020) 8218 1440