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Exhibit 99.1

Apple Reports First Quarter Results

 

Quarterly Revenue & Net Income Highest in Apple’s History

 

CUPERTINO, California—January 12, 2005—Apple® today announced financial results for its fiscal 2005 first quarter ended December 25, 2004. For the quarter, the Company posted a net profit of $295 million, or $.70 per diluted share. These results compare to a net profit of $63 million, or $.17 per diluted share, in the year-ago quarter. Revenue for the quarter was $3.49 billion, up 74 percent from the year-ago quarter. Gross margin was 28.5 percent, up from 26.7 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter’s revenue.

 

Apple shipped 1,046,000 Macintosh® units and 4,580,000 iPods during the quarter, representing a 26 percent increase in CPU units and a 525 percent increase in iPods over the year-ago quarter.

 

“We are thrilled to report the highest quarterly revenue and net income in Apple’s history,” said Steve Jobs, Apple’s CEO. “We’ve sold over 10 million iPods to date and are kicking off the new year with a slate of innovative new products including iPod shuffle, Mac mini and iLife ‘05.”

 

“We’re pleased to report 74 percent revenue growth, 26 percent Mac unit growth and 525 percent iPod unit growth,” said Peter Oppenheimer, Apple’s CFO.  “Looking ahead to the second quarter of fiscal 2005, we expect revenue of about $2.9 billion and earnings per diluted share of about $.40.”

 

Apple will provide live streaming of its Q1 2005 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 2:00 p.m. PST on Wednesday, January 12, 2005 at http://www.apple.com/quicktime/qtv/earningsq105/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.

 

This press release contains forward-looking statements about the Company’s estimated revenue and earnings for the second 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 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, 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 natural disasters or 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 Form 10-K for the fiscal year ended September 25, 2004 and the Company’s Form 10-Q for the quarter ended December 25, 2004 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.

 

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.

 

Press Contact:

Steve Dowling

(408) 974-1896

dowling@apple.com

 

Investor Relations Contacts:

Nancy Paxton

(408) 974-5420

paxton1@apple.com

 

Joan Hoover

(408) 974-4570

hoover1@apple.com

 

NOTE TO EDITORS: For additional information visit Apple’s PR web site (http://www.apple.com/pr/) or call Apple’s Media Helpline at (408) 974-2042

 

 

© 2005 Apple. All rights reserved. Apple, the Apple logo, Macintosh, Mac, Mac OS, iPod and QuickTime are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners.

 



 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In millions, except share amounts)

 

 

 

 

 

 

December 25,

 

September 25,

 

 

 

2004

 

2004

 

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

2,475

 

$

2,969

 

Short-term investments

 

3,973

 

2,495

 

Accounts receivable, less allowances of $51 and $47, respectively

 

865

 

774

 

Inventories

 

156

 

101

 

Deferred tax assets

 

281

 

231

 

Other current assets

 

572

 

485

 

Total current assets

 

8,322

 

7,055

 

Property, plant, and equipment, net

 

735

 

707

 

Goodwill

 

80

 

80

 

Acquired intangible assets

 

16

 

17

 

Other assets

 

209

 

191

 

Total assets

 

$

9,362

 

$

8,050

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

1,737

 

$

1,451

 

Accrued expenses

 

1,487

 

1,200

 

Total current liabilities

 

3,224

 

2,651

 

Deferred tax liabilities and other non-current liabilities

 

348

 

323

 

Total liabilities

 

3,572

 

2,974

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, no par value; 900,000,000 shares authorized; 404,549,022 and 391,443,617 shares issued and outstanding, respectively

 

2,911

 

2,514

 

Deferred stock compensation

 

(83

)

(93

)

Retained earnings

 

2,965

 

2,670

 

Accumulated other comprehensive income (loss)

 

(3

)

(15

)

Total shareholders’ equity

 

5,790

 

5,076

 

Total liabilities and shareholders’ equity

 

$

9,362

 

$

8,050

 

 



 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(In millions, except share and per share amounts)

 

 

 

THREE MONTHS ENDED

 

 

 

December 25,

 

December 27,

 

 

 

2004

 

2003

 

 

 

 

 

 

 

Net sales

 

$

3,490

 

$

2,006

 

Cost of sales

 

2,494

 

1,470

 

Gross margin

 

996

 

536

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Research and development

 

123

 

119

 

Selling, general, and administrative

 

470

 

343

 

Total operating expenses

 

593

 

462

 

 

 

 

 

 

 

Operating income

 

403

 

74

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

Gains on non-current investments

 

—

 

4

 

Interest and other income, net

 

26

 

9

 

Total other income and expense

 

26

 

13

 

 

 

 

 

 

 

Income before provision for income taxes

 

429

 

87

 

Provision for income taxes

 

134

 

24

 

 

 

 

 

 

 

Net income

 

$

295

 

$

63

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

Basic

 

$

0.75

 

$

0.17

 

Diluted

 

$

0.70

 

$

0.17

 

 

 

 

 

 

 

Shares used in computing earnings per share (in thousands):

 

 

 

 

 

Basic

 

394,516

 

362,450

 

Diluted

 

419,087

 

372,308

 

 


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