Apple Inc 8-K 2011-07-19
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Exhibit 99.1
Apple Reports Third Quarter Results
All-Time Record Revenue and Earnings
iPhone Sales Grow 142 Percent; iPad Sales Grow 183 Percent
CUPERTINO, CaliforniaJuly 19, 2011Apple® today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarters revenue.
The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter. Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter. The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter. Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter.
Were thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent, said Steve Jobs, Apples CEO. Right now, were very focused and excited about bringing iOS 5 and iCloud to our users this fall.
We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year, said Peter Oppenheimer, Apples CFO. Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50.
Apple will provide live streaming of its Q3 2011 financial results conference call beginning at 2:00 p.m. PDT on July 19, 2011 at www.apple.com/quicktime/qtv/earningsq311. This webcast will also be available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including without limitation those about the Companys estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation 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; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Companys gross margin; the inventory risk associated with the Companys need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Companys business currently obtained by the Company from sole or limited sources; 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; risks associated with the Companys international operations; the Companys reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Companys dependency on the performance of distributors, carriers and other resellers of the Companys products; the effect that product and service quality problems could have on the Companys sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Companys financial results is included from time to time in the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations sections of the Companys public reports filed with the SEC, including the Companys Form 10-K for the fiscal year ended September 25, 2010, its Forms 10-Q for the quarters ended December 25, 2010 and March 26, 2011, and its Form 10-Q for the quarter ended June 25, 2011 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 designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices.
Press Contact:
Steve Dowling
Apple
dowling@apple.com
(408) 974-1896
Investor Relations Contacts:
Nancy Paxton
Apple
paxton1@apple.com
(408) 974-5420
Joan Hoover
Apple
hoover1@apple.com
(408) 974-4570
NOTE TO EDITORS: For additional information visit Apples PR website (www.apple.com/pr), or call Apples Media Helpline at (408) 974-2042.
© 2011 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands and per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
| Net sales |
$ | 28,571 | $ | 15,700 | $ | 79,979 | $ | 44,882 | ||||||||
| Cost of sales (1) |
16,649 | 9,564 | 47,541 | 26,710 | ||||||||||||
| Gross margin |
11,922 | 6,136 | 32,438 | 18,172 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development (1) |
628 | 464 | 1,784 | 1,288 | ||||||||||||
| Selling, general and administrative (1) |
1,915 | 1,438 | 5,574 | 3,946 | ||||||||||||
| Total operating expenses |
2,543 | 1,902 | 7,358 | 5,234 | ||||||||||||
| Operating income |
9,379 | 4,234 | 25,080 | 12,938 | ||||||||||||
| Other income and expense |
172 | 58 | 334 | 141 | ||||||||||||
| Income before provision for income taxes |
9,551 | 4,292 | 25,414 | 13,079 | ||||||||||||
| Provision for income taxes |
2,243 | 1,039 | 6,115 | 3,374 | ||||||||||||
| Net income |
$ | 7,308 | $ | 3,253 | $ | 19,299 | $ | 9,705 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Basic |
$ | 7.89 | $ | 3.57 | $ | 20.91 | $ | 10.69 | ||||||||
| Diluted |
$ | 7.79 | $ | 3.51 | $ | 20.63 | $ | 10.51 | ||||||||
| Shares used in computing earnings per share: |
||||||||||||||||
| Basic |
926,108 | 912,197 | 922,917 | 907,762 | ||||||||||||
| Diluted |
937,810 | 927,361 | 935,688 | 923,341 | ||||||||||||
| (1) Includes stock-based compensation expense as follows: |
|
|||||||||||||||
| Cost of sales |
$ | 52 | $ | 38 | $ | 155 | $ | 112 | ||||||||
| Research and development |
$ | 119 | $ | 80 | $ | 336 | $ | 240 | ||||||||
| Selling, general and administrative |
$ | 113 | $ | 101 | $ | 379 | $ | 303 | ||||||||
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
| June 25, 2011 |
September 25, 2010 |
|||||||
| ASSETS: | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 12,091 | $ | 11,261 | ||||
| Short-term marketable securities |
16,304 | 14,359 | ||||||
| Accounts receivable, less allowances of $55 in each period |
6,102 | 5,510 | ||||||
| Inventories |
889 | 1,051 | ||||||
| Deferred tax assets |
1,892 | 1,636 | ||||||
| Vendor non-trade receivables |
5,369 | 4,414 | ||||||
| Other current assets |
4,251 | 3,447 | ||||||
| Total current assets |
46,898 | 41,678 | ||||||
| Long-term marketable securities |
47,761 | 25,391 | ||||||
| Property, plant and equipment, net |
6,749 | 4,768 | ||||||
| Goodwill |
741 | 741 | ||||||
| Acquired intangible assets, net |
1,169 | 342 | ||||||
| Other assets |
3,440 | 2,263 | ||||||
| Total assets |
$ | 106,758 | $ | 75,183 | ||||
| LIABILITIES AND SHAREHOLDERS EQUITY: | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 15,270 | $ | 12,015 | ||||
| Accrued expenses |
7,597 | 5,723 | ||||||
| Deferred revenue |
3,992 | 2,984 | ||||||
| Total current liabilities |
26,859 | 20,722 | ||||||
| Deferred revenue non-current |
1,407 | 1,139 | ||||||
| Other non-current liabilities |
9,149 | 5,531 | ||||||
| Total liabilities |
37,415 | 27,392 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders equity: |
||||||||
| Common stock, no par value; 1,800,000,000 shares authorized; 926,903,779 and 915,970,050 shares issued and outstanding, respectively |
12,715 | 10,668 | ||||||
| Retained earnings |
56,239 | 37,169 | ||||||
| Accumulated other comprehensive income/(loss) |
389 | (46 | ) | |||||
| Total shareholders equity |
69,343 | 47,791 | ||||||
| Total liabilities and shareholders equity |
$ | 106,758 | $ | 75,183 | ||||
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| Nine Months Ended | ||||||||
| June 25, 2011 |
June 26, 2010 |
|||||||
| Cash and cash equivalents, beginning of the period |
$ | 11,261 | $ | 5,263 | ||||
| Operating activities: |
||||||||
| Net income |
19,299 | 9,705 | ||||||
| Adjustments to reconcile net income to cash generated by operating activities: |
||||||||
| Depreciation, amortization and accretion |
1,271 | 698 | ||||||
| Stock-based compensation expense |
870 | 655 | ||||||
| Deferred income tax expense |
2,232 | 1,298 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable, net |
(592 | ) | (79 | ) | ||||
| Inventories |
162 | (487 | ) | |||||
| Vendor non-trade receivables |
(955 | ) | (1,256 | ) | ||||
| Other current and non-current assets |
(1,551 | ) | (1,001 | ) | ||||
| Accounts payable |
2,480 | 2,812 | ||||||
| Deferred revenue |
1,276 | 806 | ||||||
| Other current and non-current liabilities |
2,608 | (239 | ) | |||||
| Cash generated by operating activities |
27,100 | 12,912 | ||||||
| Investing activities: |
||||||||
| Purchases of marketable securities |
(75,133 | ) | (41,318 | ) | ||||
| Proceeds from maturities of marketable securities |
16,396 | 19,758 | ||||||
| Proceeds from sales of marketable securities |
34,301 | 14,048 | ||||||
| Payments made in connection with business acquisitions, net of cash acquired |
0 | (615 | ) | |||||
| Payments for acquisition of property, plant and equipment |
(2,615 | ) | (1,245 | ) | ||||
| Payments for acquisition of intangible assets |
(266 | ) | (63 | ) | ||||
| Other |
34 | (36 | ) | |||||
| Cash used in investing activities |
(27,283 | ) | (9,471 | ) | ||||
| Financing activities: |
||||||||
| Proceeds from issuance of common stock |
577 | 733 | ||||||
| Excess tax benefits from equity awards |
915 | 652 | ||||||
| Taxes paid related to net share settlement of equity awards |
(479 | ) | (384 | ) | ||||
| Cash generated by financing activities |
1,013 | 1,001 | ||||||
| Increase in cash and cash equivalents |
830 | 4,442 | ||||||
| Cash and cash equivalents, end of the period |
$ | 12,091 | $ | 9,705 | ||||
| Supplemental cash flow disclosure: |
||||||||
| Cash paid for income taxes, net |
$ | 2,563 | $ | 2,657 | ||||
