Apple Inc 8-K 2007-07-25
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Exhibit 99.1
Apple Reports Third Quarter Results
Record June Quarter Revenue and Profit
Mac Sales Set New Record
CUPERTINO, CaliforniaJuly 25, 2007Apple® today announced financial results for its fiscal 2007 third quarter ended June 30, 2007. The Company posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. These results compare to revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent, up from 30.3 percent in the year-ago quarter. International sales accounted for 40 percent of the quarters revenue.
Apple shipped 1,764,000 Macintosh® computers, representing 33 percent growth over the year-ago quarter and exceeding the previous company record for quarterly Mac® shipments by over 150,000. The Company also sold 9,815,000 iPods during the quarter, representing 21 percent growth over the year-ago quarter.
Were thrilled to report the highest June quarter revenue and profit in Apples history, along with the highest quarterly Mac sales ever, said Steve Jobs, Apples CEO. iPhone is off to a great startwe hope to sell our one-millionth iPhone by the end of its first full quarter of salesand our new product pipeline is very strong.
We are very pleased to report strong financial results including cash flow from operations exceeding $1.2 billion for the quarter, said Peter Oppenheimer, Apples CFO. Looking ahead to the fourth fiscal quarter of 2007, we expect revenue of about $5.7 billion and earnings per diluted share of about $.65.
Apple will provide live streaming of its Q3 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. PDT on Wednesday, July 25, 2007 at www.apple.com/quicktime/qtv/earningsq307/ 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 Companys estimated revenue, iPhone sales 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 Companys reliance on a sole U.S. service provider for iPhone; 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 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 Companys gross margin; 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; 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 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, its Forms 10-Q for the quarters ended December 30, 2006 and March 31, 2007, and its Form 10-Q for the quarter ended June 30, 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 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, QuickTime and iPhone 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)
|
|
|
June 30, |
|
September 30, |
|
||
|
ASSETS: |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
7,118 |
|
$ |
6,392 |
|
|
Short-term investments |
|
6,649 |
|
3,718 |
|
||
|
Accounts receivable, less allowances of $47 and $52, respectively |
|
1,410 |
|
1,252 |
|
||
|
Inventories |
|
251 |
|
270 |
|
||
|
Deferred tax assets |
|
687 |
|
607 |
|
||
|
Other current assets |
|
2,630 |
|
2,270 |
|
||
|
Total current assets |
|
18,745 |
|
14,509 |
|
||
|
Property, plant and equipment, net |
|
1,626 |
|
1,281 |
|
||
|
Goodwill |
|
38 |
|
38 |
|
||
|
Acquired intangible assets, net |
|
237 |
|
139 |
|
||
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Other assets |
|
1,001 |
|
1,238 |
|
||
|
|
|
|
|
|
|
||
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Total assets |
|
$ |
21,647 |
|
$ |
17,205 |
|
|
|
|
|
|
|
|
||
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LIABILITIES AND SHAREHOLDERS EQUITY: |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
3,660 |
|
$ |
3,390 |
|
|
Accrued expenses |
|
3,332 |
|
3,053 |
|
||
|
Total current liabilities |
|
6,992 |
|
6,443 |
|
||
|
Non-current liabilities and other |
|
1,251 |
|
778 |
|
||
|
Total liabilities |
|
8,243 |
|
7,221 |
|
||
|
|
|
|
|
|
|
||
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Commitments and contingencies |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Shareholders equity: |
|
|
|
|
|
||
|
Common stock, no par value; 1,800,000,000 shares authorized; 869,161,821 and 855,262,568 shares issued and outstanding, respectively |
|
5,149 |
|
4,355 |
|
||
|
Retained earnings |
|
8,199 |
|
5,607 |
|
||
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Accumulated other comprehensive income |
|
56 |
|
22 |
|
||
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Total shareholders equity |
|
13,404 |
|
9,984 |
|
||
|
|
|
|
|
|
|
||
|
Total liabilities and shareholders equity |
|
$ |
21,647 |
|
$ |
17,205 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
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June 30, |
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July 1, |
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June 30, |
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July 1, |
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||||
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Net sales |
|
$ |
5,410 |
|
$ |
4,370 |
|
$ |
17,789 |
|
$ |
14,478 |
|
|
Cost of sales (1) |
|
3,415 |
|
3,045 |
|
11,725 |
|
10,292 |
|
||||
|
Gross margin |
|
1,995 |
|
1,325 |
|
6,064 |
|
4,186 |
|
||||
|
|
|
|
|
|
|
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|
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|
||||
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Operating expenses: |
|
|
|
|
|
|
|
|
|
||||
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Research and development (1) |
|
208 |
|
175 |
|
575 |
|
533 |
|
||||
|
Selling, general, and administrative (1) |
|
746 |
|
584 |
|
2,140 |
|
1,808 |
|
||||
|
Total operating expenses |
|
954 |
|
759 |
|
2,715 |
|
2,341 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income |
|
1,041 |
|
566 |
|
3,349 |
|
1,845 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Other income and expense |
|
155 |
|
95 |
|
429 |
|
252 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Income before provision for income taxes |
|
1,196 |
|
661 |
|
3,778 |
|
2,097 |
|
||||
|
Provision for income taxes |
|
378 |
|
189 |
|
1,186 |
|
650 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
818 |
|
$ |
472 |
|
$ |
2,592 |
|
$ |
1,447 |
|
|
|
|
|
|
|
|
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|
||||
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Earnings per common share: |
|
|
|
|
|
|
|
|
|
||||
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Basic |
|
$ |
0.94 |
|
$ |
0.55 |
|
$ |
3.01 |
|
$ |
1.72 |
|
|
Diluted |
|
$ |
0.92 |
|
$ |
0.54 |
|
$ |
2.92 |
|
$ |
1.65 |
|
|
|
|
|
|
|
|
|
|
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|
||||
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Shares used in computing earnings per share (in thousands): |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
866,806 |
|
851,375 |
|
862,500 |
|
840,759 |
|
||||
|
Diluted |
|
890,671 |
|
876,368 |
|
887,095 |
|
876,971 |
|
||||
(1) Stock-based compensation expense was allocated as follows:
|
Cost of sales |
|
$ |
10 |
|
$ |
6 |
|
$ |
25 |
|
$ |
16 |
|
|
Research and development |
|
$ |
20 |
|
$ |
12 |
|
$ |
56 |
|
$ |
40 |
|
|
Selling, general, and administrative |
|
$ |
35 |
|
$ |
19 |
|
$ |
93 |
|
$ |
67 |
|
UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE
(in millions)
|
|
|
June 30, |
|
March 31, |
|
September 30, |
|
|||
|
Deferred revenue-current: |
|
|
|
|
|
|
|
|||
|
iPhone and Apple TV |
|
$ |
92 |
|
$ |
10 |
|
$ |
|
|
|
AppleCare |
|
399 |
|
373 |
|
333 |
|
|||
|
Other |
|
572 |
|
520 |
|
385 |
|
|||
|
Total deferred revenue-current |
|
1,063 |
|
903 |
|
718 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Deferred revenue-non-current: |
|
|
|
|
|
|
|
|||
|
iPhone and Apple TV |
|
88 |
|
10 |
|
|
|
|||
|
AppleCare |
|
435 |
|
392 |
|
355 |
|
|||
|
Other |
|
38 |
|
31 |
|
28 |
|
|||
|
Total deferred revenue-non-current |
|
561 |
|
433 |
|
383 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Total deferred revenue |
|
$ |
1,624 |
|
$ |
1,336 |
|
$ |
1,101 |
|
