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Exhibit 99.1
Apple Reports First Quarter Results
Revenue Exceeds $7 Billion; Record Profit of $1 Billion
CUPERTINO, CaliforniaJanuary 17, 2007Apple® today announced financial results for its fiscal 2007 first quarter ended December 30, 2006. The Company posted record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share. These results compare to revenue of $5.7 billion and net quarterly profit of $565 million, or $.65 per diluted share, in the year-ago quarter. Gross margin was 31.2 percent, up from 27.2 percent in the year-ago quarter. International sales accounted for 42 percent of the quarters revenue.
Apple shipped 1,606,000 Macintosh® computers and 21,066,000 iPods during the quarter, representing 28 percent growth in Macs and 50 percent growth in iPods over the year-ago quarter.
We are incredibly pleased to report record quarterly revenue of over $7 billion and record earnings of $1 billion, said Steve Jobs, Apples CEO. Weve just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone.
We generated over $1.75 billion in cash during the quarter to end with $11.9 billion, said Peter Oppenheimer, Apples CFO. Looking ahead to the second fiscal quarter of 2007, we expect revenue of $4.8 to $4.9 billion and earnings per diluted share of $.54 to $.56.
Apple will provide live streaming of its Q1 2007 financial results conference call utilizing QuickTime®, Apples 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 17, 2007 at www.apple.com/quicktime/qtv/earningsq107/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
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This press release contains forward-looking statements about the Companys estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include potential litigation and government enforcement actions that may result from the matters investigated by the special committee of the board of directors and the restatement of the Companys consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Companys reaction to those factors, on consumer and business buying decisions with respect to the Companys products; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; continued competitive pressures in the marketplace; the continued availability on acceptable terms of certain components and services essential to the Companys business currently obtained by the Company from sole or limited sources; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the effect that product quality problems could have on the Companys sales and operating profits; the inventory risk associated with the Companys need to order or commit to order product components in advance of customer orders; the effect that the Companys 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 Companys dependency on the performance of distributors and other resellers of the Companys products; the Companys reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; and risks associated with the Companys retail initiative, including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships. More information on potential factors that could affect the Companys financial results is included from time to time in the Companys public reports filed with the SEC, including the Companys Form 10-K for the fiscal year ended September 30, 2006 and the Companys Form 10-Q for the quarter ended December 30, 2006 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 store.
Press Contact:
Steve Dowling
(408) 974-1896
dowling@apple.com
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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 Apples PR website (www.apple.com/pr/), or call Apples Media Helpline at (408) 974-2042.
© 2007 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and QuickTime are 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 30, |
|
September 30, |
|
||
|
|
2006 |
|
2006 |
|
||
ASSETS: |
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
7,159 |
|
$ |
6,392 |
|
Short-term investments |
|
4,710 |
|
3,718 |
|
||
Accounts receivable, less allowances of $50 and $52, respectively |
|
1,621 |
|
1,252 |
|
||
Inventories |
|
303 |
|
270 |
|
||
Deferred tax assets |
|
648 |
|
607 |
|
||
Other current assets |
|
2,223 |
|
2,270 |
|
||
Total current assets |
|
16,664 |
|
14,509 |
|
||
Property, plant, and equipment, net |
|
1,362 |
|
1,281 |
|
||
Goodwill |
|
38 |
|
38 |
|
||
Acquired intangible assets, net |
|
146 |
|
139 |
|
||
Other assets |
|
1,251 |
|
1,238 |
|
||
Total assets |
|
$ |
19,461 |
|
$ |
17,205 |
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS EQUITY: |
|
|
|
|
|
||
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
|
$ |
3,885 |
|
$ |
3,390 |
|
Accrued expenses |
|
3,452 |
|
3,081 |
|
||
Total current liabilities |
|
7,337 |
|
6,471 |
|
||
Non-current liabilities |
|
896 |
|
750 |
|
||
Total liabilities |
|
8,233 |
|
7,221 |
|
||
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
||
|
|
|
|
|
|
||
Shareholders equity: |
|
|
|
|
|
||
Common stock, no par value; 1,800,000,000 shares authorized; 860,219,891 and 855,262,568 shares issued and outstanding, respectively |
|
4,594 |
|
4,355 |
|
||
Retained earnings |
|
6,611 |
|
5,607 |
|
||
Accumulated other comprehensive income |
|
23 |
|
22 |
|
||
Total shareholders equity |
|
11,228 |
|
9,984 |
|
||
Total liabilities and shareholders equity |
|
$ |
19,461 |
|
$ |
17,205 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
|
|
Three Months Ended |
|
||||
|
|
December 30, |
|
December 31, |
|
||
|
|
2006 |
|
2005 |
|
||
Net sales |
|
$ |
7,115 |
|
$ |
5,749 |
|
Cost of sales (1) |
|
4,895 |
|
4,185 |
|
||
Gross margin |
|
2,220 |
|
1,564 |
|
||
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
||
Research and development (1) |
|
184 |
|
182 |
|
||
Selling, general, and administrative (1) |
|
714 |
|
632 |
|
||
Total operating expenses |
|
898 |
|
814 |
|
||
|
|
|
|
|
|
||
Operating income |
|
1,322 |
|
750 |
|
||
|
|
|
|
|
|
||
Other income and expense |
|
126 |
|
81 |
|
||
|
|
|
|
|
|
||
Income before provision for income taxes |
|
1,448 |
|
831 |
|
||
Provision for income taxes |
|
444 |
|
266 |
|
||
|
|
|
|
|
|
||
Net income |
|
$ |
1,004 |
|
$ |
565 |
|
|
|
|
|
|
|
||
Earnings per common share: |
|
|
|
|
|
||
Basic |
|
$ |
1.17 |
|
$ |
0.68 |
|
Diluted |
|
$ |
1.14 |
|
$ |
0.65 |
|
|
|
|
|
|
|
||
Shares used in computing earnings per share (in thousands): |
|
|
|
|
|
||
Basic |
|
857,691 |
|
830,781 |
|
||
Diluted |
|
883,297 |
|
874,207 |
|
(1) Includes stock-based compensation expense, which was allocated as follows:
Cost of sales |
|
$ |
6 |
|
$ |
5 |
|
Research and development |
|
$ |
16 |
|
$ |
15 |
|
Selling, general, and administrative |
|
$ |
24 |
|
$ |
24 |
|