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Exhibit 99.1

 

Apple Reports Fourth Quarter Results

 

Quarterly Mac Sales Set New Record

 

Quarterly iPhone Sales Exceed One Million

 

CUPERTINO, California—October 22, 2007—Apple® today announced financial results for its fiscal 2007 fourth quarter ended September 29, 2007. The Company posted revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. These results compare to revenue of $4.84 billion and net quarterly profit of $542 million, or $.62 per diluted share, in the year-ago quarter. Gross margin was 33.6 percent, up from 29.2 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

 

Apple shipped 2,164,000 Macintosh® computers, representing 34 percent growth over the year-ago quarter and exceeding the previous quarterly record for Mac® shipments by 400,000. The Company sold 10,200,000 iPods during the quarter, representing 17 percent growth over the year-ago quarter. Quarterly iPhone™ sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000.

 

“We are very pleased to have generated over $24 billion in revenue and $3.5 billion in net income in fiscal 2007,” said Steve Jobs, Apple’s CEO. “We’re looking forward to a strong December quarter as we enter the holiday season with Apple’s best products ever.”

 

“Apple ended the fiscal year with $15.4 billion in cash and no debt,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first quarter of fiscal 2008, we expect revenue of about $9.2 billion and earnings per diluted share of about $1.42.”

 

Apple will provide live streaming of its Q4 2007 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. PDT on Monday, October 22, 2007 at www.apple.com/quicktime/qtv/earningsq407/ and will also be available for replay.

 

 



This press release contains forward-looking statements about the Company’s 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 Company’s consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s 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 Company’s reliance on sole service providers for iPhone in the U.S., U.K., Germany and France; the continued availability on acceptable terms of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; 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 transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the effect that product quality problems could have on the Company’s sales and operating profits; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; 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 dependency on the performance of distributors and other resellers of the Company’s products; the Company’s reliance on the availability of third-party digital content; and the potential impact of a finding that the Company has infringed on the intellectual property rights of others. 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 30, 2006, its Forms 10-Q for the quarters ended December 30, 2006, March 31, 2007, and June 30, 2007, and its Form 10-K for the year ended September 29, 2007 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 computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.

 

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 website (www.apple.com/pr/), or call Apple’s Media Helpline at (408) 974-2042.

 

© 2007 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone 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)

 

 

 

September 29, 
2007

 

September 30, 
2006

 

 

 

 

 

 

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

9,352

 

$

6,392

 

Short-term investments

 

6,034

 

3,718

 

Accounts receivable, less allowances of $47 and $52, respectively

 

1,637

 

1,252

 

Inventories

 

346

 

270

 

Deferred tax assets

 

782

 

607

 

Other current assets

 

3,805

 

2,270

 

Total current assets

 

21,956

 

14,509

 

Property, plant and equipment, net

 

1,832

 

1,281

 

Goodwill

 

38

 

38

 

Acquired intangible assets, net

 

299

 

139

 

Other assets

 

1,222

 

1,238

 

Total assets

 

$

25,347

 

$

17,205

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

4,970

 

$

3,390

 

Accrued expenses

 

4,329

 

3,053

 

Total current liabilities

 

9,299

 

6,443

 

Non-current liabilities

 

1,516

 

778

 

Total liabilities

 

10,815

 

7,221

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, no par value; 1,800,000,000 shares authorized; 872,328,972 and 855,262,568 shares issued and outstanding, respectively

 

5,368

 

4,355

 

Retained earnings

 

9,101

 

5,607

 

Accumulated other comprehensive income

 

63

 

22

 

Total shareholders’ equity

 

14,532

 

9,984

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

25,347

 

$

17,205

 

 



 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in millions, except share and per share amounts)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

September 29,
2007

 

September 30,
2006

 

September 29,
2007

 

September 30,
2006

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

6,217

 

$

4,837

 

$

24,006

 

$

19,315

 

Cost of sales (1)

 

4,127

 

3,425

 

15,852

 

13,717

 

Gross margin

 

2,090

 

1,412

 

8,154

 

5,598

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development (1)

 

207

 

179

 

782

 

712

 

Selling, general, and administrative (1)

 

823

 

625

 

2,963

 

2,433

 

Total operating expenses

 

1,030

 

804

 

3,745

 

3,145

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,060

 

608

 

4,409

 

2,453

 

 

 

 

 

 

 

 

 

 

 

Other income and expense

 

170

 

113

 

599

 

365

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,230

 

721

 

5,008

 

2,818

 

Provision for income taxes

 

326

 

179

 

1,512

 

829

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

904

 

$

542

 

$

3,496

 

$

1,989

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

1.04

 

$

0.63

 

$

4.04

 

$

2.36

 

Diluted

 

$

1.01

 

$

0.62

 

$

3.93

 

$

2.27

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

870,881

 

854,187

 

864,595

 

844,058

 

Diluted

 

895,666

 

878,757

 

889,292

 

877,526

 


(1) Stock-based compensation expense was allocated as follows:

 

Cost of sales

 

$

10

 

$

5

 

$

35

 

$

21

 

Research and development

 

$

21

 

$

13

 

$

77

 

$

53

 

Selling, general, and administrative

 

$

37

 

$

22

 

$

130

 

$

89

 

 



 

UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

 

(in millions)

 

 

 

September 29,
2007

 

June 30,
2007

 

March 31,
2007

 

September 30,
2006

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue-current:

 

 

 

 

 

 

 

 

 

iPhone and Apple TV

 

$

346

 

$

92

 

$

10

 

$

—

 

AppleCare

 

430

 

399

 

373

 

333

 

Other

 

634

 

572

 

520

 

385

 

Total deferred revenue-current

 

1,410

 

1,063

 

903

 

718

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue-non-current:

 

 

 

 

 

 

 

 

 

iPhone and Apple TV

 

290

 

88

 

10

 

—

 

AppleCare

 

495

 

435

 

392

 

355

 

Other

 

45

 

38

 

31

 

28

 

Total deferred revenue-non-current

 

830

 

561

 

433

 

383

 

 

 

 

 

 

 

 

 

 

 

Total deferred revenue

 

$

2,240

 

$

1,624

 

$

1,336

 

$

1,101

 

 


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