Apple Inc 8-K 2010-04-20

Text of press release issued by Apple Inc.

Exhibit 99.1

Apple Reports Second Quarter Results

Record March Quarter Revenue and Profit

iPhone Sales More Than Double

CUPERTINO, CaliforniaApril 20, 2010Apple^® today announced financial results for its fiscal 2010 second quarter ended March 27, 2010. The Company posted revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share. These results compare to revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent, up from 39.9 percent in the year-ago quarter. International sales accounted for 58 percent of the quarters revenue.

Apple sold 2.94 million Macintosh^® computers during the quarter, representing a 33 percent unit increase over the year-ago quarter. The Company sold 8.75 million iPhones in the quarter, representing 131 percent unit growth over the year-ago quarter. Apple sold 10.89 million iPods during the quarter, representing a one percent unit decline from the year-ago quarter.

Were thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent, said Steve Jobs, Apples CEO. Weve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.

Looking ahead to the third fiscal quarter of 2010, we expect revenue in the range of about $13.0 billion to $13.4 billion and we expect diluted earnings per share in the range of about $2.28 to $2.39, said Peter Oppenheimer, Apples CFO.

Apple will provide live streaming of its Q2 2010 financial results conference call beginning at 2:00 p.m. PDT on April 20, 2010 at www.apple.com/quicktime/qtv/earningsq210/. 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 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; the Companys reliance on the availability of third-party digital content and applications; 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 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 Companys reliance on sole service providers for iPhone^® in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Companys consolidated financial statements; 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 Companys public reports filed with the SEC, including the Companys Form 10-K, as amended, for the fiscal year ended September 26, 2009, its Form 10-Q for the quarter ended December 26, 2009, and its Form 10-Q for the quarter ended March 27, 2010 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 with the Apple II, then reinvented the personal computer with the Macintosh. Apple continues to lead the industry with its award-winning computers, OS X operating system, and iLife, iWork and professional applications. Apple leads the digital music revolution with its iPods and iTunes online store, has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad 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.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands and per share amounts)


	Three Months Ended				Six Months Ended
	March 27, 2010		March 28, 2009		March 27, 2010		March 28, 2009
Net sales	$	13,499	$	9,084	$	29,182	$	20,964
Cost of sales (1)		7,874		5,457		17,146		12,830

Gross margin		5,625		3,627		12,036		8,134

Operating expenses:
Research and development (1)		426		319		824		634
Selling, general and administrative (1)		1,220		985		2,508		2,076

Total operating expenses		1,646		1,304		3,332		2,710

Operating income		3,979		2,323		8,704		5,424
Other income and expense		50		63		83		221

Income before provision for income taxes		4,029		2,386		8,787		5,645
Provision for income taxes		955		766		2,335		1,770

Net income	$	3,074	$	1,620	$	6,452	$	3,875


Earnings per common share:
Basic	$	3.39	$	1.82	$	7.12	$	4.35
Diluted	$	3.33	$	1.79	$	7.00	$	4.29

Shares used in computing earnings per share:
Basic		907,548		891,180		905,545		890,161
Diluted		922,878		902,993		921,331		902,243

(1) Includes stock-based compensation expense as follows:
Cost of sales	$	37	$	29	$	74	$	57
Research and development	$	86	$	67	$	160	$	127
Selling, general and administrative	$	108	$	85	$	202	$	167

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)


	March 27, 2010		September 26, 2009
ASSETS:
Current assets:
Cash and cash equivalents	$	10,018	$	5,263
Short-term marketable securities		13,137		18,201
Accounts receivable, less allowances of $57 and $52, respectively		2,886		3,361
Inventories		638		455
Deferred tax assets		1,142		1,135
Other current assets		4,515		3,140

Total current assets		32,336		31,555

Long-term marketable securities		18,549		10,528
Property, plant and equipment, net		3,504		2,954
Goodwill		480		206
Acquired intangible assets, net		263		247
Other assets		1,925		2,011

Total assets	$	57,057	$	47,501


LIABILITIES AND SHAREHOLDERS EQUITY:
Current liabilities:
Accounts payable	$	5,666	$	5,601
Accrued expenses		4,021		3,852
Deferred revenue		2,542		2,053

Total current liabilities		12,229		11,506

Deferred revenue non-current		941		853
Other non-current liabilities		4,539		3,502

Total liabilities		17,709		15,861


Commitments and contingencies

Shareholders equity:
Common stock, no par value; 1,800,000,000 shares authorized; 909,635,811 and 899,805,500 shares issued and outstanding, respectively		9,553		8,210
Retained earnings		29,670		23,353
Accumulated other comprehensive income		125		77

Total shareholders equity		39,348		31,640

Total liabilities and shareholders equity	$	57,057	$	47,501

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)


	Six Months Ended
	March 27, 2010			March 28, 2009
Cash and cash equivalents, beginning of the period	$	5,263		$	11,875

Operating activities:
Net income		6,452			3,875
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion		425			349
Stock-based compensation expense		436			351
Deferred income tax expense		893			570
Loss on disposition of property, plant and equipment		9			8
Changes in operating assets and liabilities:
Accounts receivable, net		482			490
Inventories		(183	)		197
Other current assets		(824	)		1,234
Other assets		149			(361	)
Accounts payable		(18	)		(1,527	)
Deferred revenue		577			128
Other liabilities		(287	)		(535	)

Cash generated by operating activities		8,111			4,779

Investing activities:
Purchases of marketable securities		(25,061	)		(23,483	)
Proceeds from maturities of marketable securities		13,331			6,280
Proceeds from sales of marketable securities		8,686			5,457
Purchases of other long-term investments		(9	)		(54	)
Payments made in connection with business acquisitions, net of cash acquired		(325	)
Payment for acquisition of property, plant and equipment		(650	)		(439	)
Payment for acquisition of intangible assets		(32	)		(30	)
Other		19			(55	)

Cash used in investing activities		(4,041	)		(12,324	)

Financing activities:
Proceeds from issuance of common stock		534			122
Excess tax benefits from stock-based compensation		413			47
Cash used to net share settle equity awards		(262	)		(33	)

Cash generated by financing activities		685			136


Increase/(decrease) in cash and cash equivalents		4,755			(7,409	)

Cash and cash equivalents, end of the period	$	10,018		$	4,466


Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	2,144		$	1,828

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