Apple Reports Second Quarter Profit of $43 Million

Apr 18, 2001, 01:00 ET from Apple Computer Inc.

    CUPERTINO, Calif., April 18 /PRNewswire/ -- Apple(R) (Nasdaq:   AAPL) today
 announced financial results for its fiscal 2001 second quarter ended
 March 31, 2001. For the quarter, the Company posted a net profit of
 $43 million, or $.12 per diluted share. These results compare to a net profit
 of $233 million, or $.64 per diluted share, achieved in the year ago quarter.
 Revenues for the quarter were $1.43 billion, down 26 percent from the year ago
 quarter, and gross margins were 26.9 percent, compared to 28.2 percent in the
 year ago quarter. International sales accounted for 48 percent of the
 quarter's revenues.
     The quarter's results included a $3 million net favorable impact from
 non-recurring items including an after-tax gain of $89 million resulting from
 the sale of approximately 23 million shares of ARM Holdings plc. and an after
 tax charge of $86 million related to the write down of certain equity
 investments. Without these non-recurring items, the Company's net profit for
 the quarter would have been $40 million, or $.11 per diluted share.
     Apple shipped 751 thousand Macintosh(R) units during the quarter.
     "Apple returned to profitability in this tough economic climate by
 launching several innovative new products," said Steve Jobs, Apple's CEO.
 "During the quarter we shipped the Titanium PowerBook G4, widely regarded as a
 major breakthrough in notebook computers; Mac OS X, the world's most advanced
 operating system; iTunes, the easiest way to create a music library on your
 computer and 'burn' custom music CDs; and iDVD and SuperDrive, our
 revolutionary software and drive that together enable users to create and
 'burn' their own custom DVDs. It was a great new product quarter, and there's
 still more to come."
     "We feel very good about delivering solid profitability while reaching our
 goal of 4 weeks of channel inventory ahead of schedule," said Fred Anderson,
 Apple's CFO. "Our balance sheet remains very strong, with over $4.1 billion in
 cash. We now expect to generate $3.2 to $3.4 billion in revenues in the second
 half of the fiscal year, and we are targeting sequential improvements in both
 revenues and profits in the June and September quarters."
     Apple ignited the personal computer revolution in the 1970s with the Apple
 II and reinvented the personal computer in the 1980s with the Macintosh. Apple
 is committed to bringing the best personal computing experience to students,
 educators, creative professionals and consumers around the world through its
 innovative hardware, software and Internet offerings.
 
     Apple will provide live streaming of its Q2 2001 financial results
 conference call utilizing QuickTime(TM), Apple's standards-based technology
 for live and on-demand audio and video streaming. The live webcast will begin
 at 2 p.m. PDT on Wednesday, April 18, 2001 at
 http://www.apple.com/quicktime/qtv/earningsq201/ and will also be available
 for replay. The QuickTime player is available free for Macintosh and Windows
 users at www.apple.com/quicktime .
     Except for the historical information contained herein, the statements in
 this press release are forward-looking statements that involve risks and
 uncertainties. Potential risks and uncertainties include, without limitation,
 continued competitive pressures in the marketplace; the effect competitive and
 economic factors and the Company's reaction to them may have on consumer and
 business buying decisions with respect to the Company's products; the ability
 of the Company to make timely delivery of new programs, products and
 successful technological innovations to the marketplace; the continued
 availability of certain components and services essential to the Company's
 business currently obtained by the Company from sole or limited sources and
 the ability of the Company to successfully evolve its operating system. 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 2000 fiscal year, and
 the Company's Form 10-Q for the quarter ended March 31, 2001, to be filed with
 the SEC.
 
     NOTE:  Apple, the Apple logo, Macintosh, Mac OS, PowerBook, QuickTime and
 SuperDrive are either registered trademarks or trademarks of Apple. Other
 company and product names may be trademarks of their respective owners.
 
 
                            CONSOLIDATED BALANCE SHEETS
                        (In millions, except share amounts)
 
                                      ASSETS:
 
                                                    March 31,  September 30,
                                                         2001           2000
     Current assets:
      Cash and cash equivalents                        $2,138         $1,191
      Short-term investments.                           2,006          2,836
      Accounts receivable, less allowances of
       $54 and $64, respectively                          637            953
      Inventories                                          10             33
      Deferred tax assets                                 183            162
      Other current assets                                371            252
        Total current assets                            5,345          5,427
      Property, plant, and equipment, net                 331            313
      Non-current equity investments                      151            786
      Other assets                                        303            277
        Total assets                                    6,130         $6,803
 
     LIABILITIES AND SHAREHOLDERS' EQUITY:
     Current liabilities:
      Accounts payable                                   $961          1,157
      Accrued expenses                                    834            776
        Total current liabilities                       1,795          1,933
     Long-term liabilities                                317            300
     Deferred tax liabilities                             280            463
         Total liabilities                              2,392          2,696
 
     Commitments and contingencies
 
     Shareholders' equity:
      Series A non-voting convertible
       preferred stock, no par value;
       150,000 shares authorized, none
       and 75,750 issued and outstanding,
       respectively                                         0             76
      Common stock, no par value;
       900,000,000 shares authorized;
       346,540,962 and 335,676,889
       shares issued and outstanding,
       respectively                                     1,599          1,502
      Retained earnings                                 2,133          2,285
      Accumulated other comprehensive
       income                                               6            244
        Total shareholders' equity                      3,738          4,107
        Total liabilities and shareholders'
         equity                                         6,130         $6,803
 
 
 
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except share and per share amounts)
 
                              THREE MONTHS ENDED          SIX MONTHS ENDED
                             March 31,    April 1,     March 31,     April 1,
                               2001         2000          2001         2000
 
     Net sales               $1,431        $1,945       $2,438        $4,288
     Cost of sales            1,046         1,396        2,074         3,132
     Gross margin               385           549          364         1,156
 
     Operating expenses:
     Research and development   101            92          203           182
     Selling, general, and
      administrative            292           287          589           606
     Special Charges:
      Restructuring costs         0             0            0             8
      Executive Bonus             0             0            0            90
       Total operating
        expenses                393           379          792           886
     Operating income (loss)    (8)           170        (428)           270
 
     Gains from sales of
      investments, net            5           100           76           234
     Unrealized loss on
      convertible securities      0             0         (13)             0
     Interest and other
      income (expense), net      65            49          132            89
     Total interest and
      other income (expense),
      net                        70           149          195           323
 
     Income(loss) before
      provision for (benefit
      from) income taxes         62           319        (233)           593
 
     Provision for (benefit
      from) income taxes         19            86         (69)           177
 
     Income (loss) before
      accounting change          43           233        (164)           416
 
     Cumulative effect of
      accounting change,
      net of income taxes
      of $5                       0             0           12             0
 
     Net income (loss)          $43          $233       $(152)          $416
 
     Earnings (loss) per
      common share before
      accounting change:
       Basic                  $0.12         $0.72      $(0.48)         $1.29
       Diluted                $0.12         $0.64      $(0.48)         $1.16
 
     Earnings (loss) per
      common share after
      accounting change:
       Basic                  $0.12         $0.72      $(0.44)         $1.29
       Diluted                $0.12         $0.64      $(0.44)         $1.16
 
     Shares used in
      computing earnings
      (loss) per share
      (in thousands):
       Basic                346,080       324,343      342,179       323,194
       Diluted              352,812       363,986      342,179       359,252
 
 
                              Apple Computer, Inc.
                               Q2'01 Summary Data
 
                                      Q1'01        Q2'00         Q2'01
                                     Actual       Actual        Actual
 
                                Units k Rev $m Units k Rev $m Units k Rev $m
     Product Summary
         iMac                       308    $265    474   $540   300    $286
         iBook                      100     146    115    174    55      70
         Power Mac G4 Cube           29      14      0     --    12      33
         Power Mac G4               173     267    354   $686   250     470
         PowerBook                   49      84    100    252   134     341
         Peripherals,SW & Other      --     231     --   $293    --     231
 
     Total Apple                    659  $1,007  1,043  $1,945   751 $1,431
 
 
                                 CPU            CPU            CPU
     Geographic Segments        Units k Rev $m Units k Rev $m Units k Rev $m
         Americas                   329   $513    541   $989   407     $767
         Europe, Middle East,
          Africa                    230    326    275    469   199     355
         Japan                       61     84    174    349   107     214
         Asia Pacific                39     50     53     92    38      64
     Total Geographic Segments      659   $973  1,043 $1,899   751  $1,400
 
 
                              Apple Computer, Inc.
                               Q2'01 Summary Data
 
                                          Sequential Change   Year/Year Change
                                           Units   Revenue    Units   Revenue
 
     Product Summary
           iMac                                -3%       8%     -37%     -47%
           iBook                              -45%     -52%     -52%     -60%
           Power Mac G4 Cube                  -59%     136%      NM       NM
           Power Mac G4                        45%      76%     -29%     -31%
           PowerBook                          173%     306%      34%      35%
           Peripherals,SW & Other              --        0%      --      -21%
 
     Total Apple                               14%      42%     -28%     -26%
 
                                          Sequential Change  Year/Year Change
     Geographic Segments                    Units   Revenue   Units   Revenue
           Americas                            24%      50%     -25%     -22%
           Europe, Middle East, Africa        -13%       9%     -28%     -24%
           Japan                               75%     155%     -39%     -39%
           Asia Pacific                        -3%      28%     -28%     -30%
     Total Geographic Segments                 14%      44%     -28%     -26%
 
 

SOURCE Apple Computer Inc.
    CUPERTINO, Calif., April 18 /PRNewswire/ -- Apple(R) (Nasdaq:   AAPL) today
 announced financial results for its fiscal 2001 second quarter ended
 March 31, 2001. For the quarter, the Company posted a net profit of
 $43 million, or $.12 per diluted share. These results compare to a net profit
 of $233 million, or $.64 per diluted share, achieved in the year ago quarter.
 Revenues for the quarter were $1.43 billion, down 26 percent from the year ago
 quarter, and gross margins were 26.9 percent, compared to 28.2 percent in the
 year ago quarter. International sales accounted for 48 percent of the
 quarter's revenues.
     The quarter's results included a $3 million net favorable impact from
 non-recurring items including an after-tax gain of $89 million resulting from
 the sale of approximately 23 million shares of ARM Holdings plc. and an after
 tax charge of $86 million related to the write down of certain equity
 investments. Without these non-recurring items, the Company's net profit for
 the quarter would have been $40 million, or $.11 per diluted share.
     Apple shipped 751 thousand Macintosh(R) units during the quarter.
     "Apple returned to profitability in this tough economic climate by
 launching several innovative new products," said Steve Jobs, Apple's CEO.
 "During the quarter we shipped the Titanium PowerBook G4, widely regarded as a
 major breakthrough in notebook computers; Mac OS X, the world's most advanced
 operating system; iTunes, the easiest way to create a music library on your
 computer and 'burn' custom music CDs; and iDVD and SuperDrive, our
 revolutionary software and drive that together enable users to create and
 'burn' their own custom DVDs. It was a great new product quarter, and there's
 still more to come."
     "We feel very good about delivering solid profitability while reaching our
 goal of 4 weeks of channel inventory ahead of schedule," said Fred Anderson,
 Apple's CFO. "Our balance sheet remains very strong, with over $4.1 billion in
 cash. We now expect to generate $3.2 to $3.4 billion in revenues in the second
 half of the fiscal year, and we are targeting sequential improvements in both
 revenues and profits in the June and September quarters."
     Apple ignited the personal computer revolution in the 1970s with the Apple
 II and reinvented the personal computer in the 1980s with the Macintosh. Apple
 is committed to bringing the best personal computing experience to students,
 educators, creative professionals and consumers around the world through its
 innovative hardware, software and Internet offerings.
 
     Apple will provide live streaming of its Q2 2001 financial results
 conference call utilizing QuickTime(TM), Apple's standards-based technology
 for live and on-demand audio and video streaming. The live webcast will begin
 at 2 p.m. PDT on Wednesday, April 18, 2001 at
 http://www.apple.com/quicktime/qtv/earningsq201/ and will also be available
 for replay. The QuickTime player is available free for Macintosh and Windows
 users at www.apple.com/quicktime .
     Except for the historical information contained herein, the statements in
 this press release are forward-looking statements that involve risks and
 uncertainties. Potential risks and uncertainties include, without limitation,
 continued competitive pressures in the marketplace; the effect competitive and
 economic factors and the Company's reaction to them may have on consumer and
 business buying decisions with respect to the Company's products; the ability
 of the Company to make timely delivery of new programs, products and
 successful technological innovations to the marketplace; the continued
 availability of certain components and services essential to the Company's
 business currently obtained by the Company from sole or limited sources and
 the ability of the Company to successfully evolve its operating system. 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 2000 fiscal year, and
 the Company's Form 10-Q for the quarter ended March 31, 2001, to be filed with
 the SEC.
 
     NOTE:  Apple, the Apple logo, Macintosh, Mac OS, PowerBook, QuickTime and
 SuperDrive are either registered trademarks or trademarks of Apple. Other
 company and product names may be trademarks of their respective owners.
 
 
                            CONSOLIDATED BALANCE SHEETS
                        (In millions, except share amounts)
 
                                      ASSETS:
 
                                                    March 31,  September 30,
                                                         2001           2000
     Current assets:
      Cash and cash equivalents                        $2,138         $1,191
      Short-term investments.                           2,006          2,836
      Accounts receivable, less allowances of
       $54 and $64, respectively                          637            953
      Inventories                                          10             33
      Deferred tax assets                                 183            162
      Other current assets                                371            252
        Total current assets                            5,345          5,427
      Property, plant, and equipment, net                 331            313
      Non-current equity investments                      151            786
      Other assets                                        303            277
        Total assets                                    6,130         $6,803
 
     LIABILITIES AND SHAREHOLDERS' EQUITY:
     Current liabilities:
      Accounts payable                                   $961          1,157
      Accrued expenses                                    834            776
        Total current liabilities                       1,795          1,933
     Long-term liabilities                                317            300
     Deferred tax liabilities                             280            463
         Total liabilities                              2,392          2,696
 
     Commitments and contingencies
 
     Shareholders' equity:
      Series A non-voting convertible
       preferred stock, no par value;
       150,000 shares authorized, none
       and 75,750 issued and outstanding,
       respectively                                         0             76
      Common stock, no par value;
       900,000,000 shares authorized;
       346,540,962 and 335,676,889
       shares issued and outstanding,
       respectively                                     1,599          1,502
      Retained earnings                                 2,133          2,285
      Accumulated other comprehensive
       income                                               6            244
        Total shareholders' equity                      3,738          4,107
        Total liabilities and shareholders'
         equity                                         6,130         $6,803
 
 
 
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except share and per share amounts)
 
                              THREE MONTHS ENDED          SIX MONTHS ENDED
                             March 31,    April 1,     March 31,     April 1,
                               2001         2000          2001         2000
 
     Net sales               $1,431        $1,945       $2,438        $4,288
     Cost of sales            1,046         1,396        2,074         3,132
     Gross margin               385           549          364         1,156
 
     Operating expenses:
     Research and development   101            92          203           182
     Selling, general, and
      administrative            292           287          589           606
     Special Charges:
      Restructuring costs         0             0            0             8
      Executive Bonus             0             0            0            90
       Total operating
        expenses                393           379          792           886
     Operating income (loss)    (8)           170        (428)           270
 
     Gains from sales of
      investments, net            5           100           76           234
     Unrealized loss on
      convertible securities      0             0         (13)             0
     Interest and other
      income (expense), net      65            49          132            89
     Total interest and
      other income (expense),
      net                        70           149          195           323
 
     Income(loss) before
      provision for (benefit
      from) income taxes         62           319        (233)           593
 
     Provision for (benefit
      from) income taxes         19            86         (69)           177
 
     Income (loss) before
      accounting change          43           233        (164)           416
 
     Cumulative effect of
      accounting change,
      net of income taxes
      of $5                       0             0           12             0
 
     Net income (loss)          $43          $233       $(152)          $416
 
     Earnings (loss) per
      common share before
      accounting change:
       Basic                  $0.12         $0.72      $(0.48)         $1.29
       Diluted                $0.12         $0.64      $(0.48)         $1.16
 
     Earnings (loss) per
      common share after
      accounting change:
       Basic                  $0.12         $0.72      $(0.44)         $1.29
       Diluted                $0.12         $0.64      $(0.44)         $1.16
 
     Shares used in
      computing earnings
      (loss) per share
      (in thousands):
       Basic                346,080       324,343      342,179       323,194
       Diluted              352,812       363,986      342,179       359,252
 
 
                              Apple Computer, Inc.
                               Q2'01 Summary Data
 
                                      Q1'01        Q2'00         Q2'01
                                     Actual       Actual        Actual
 
                                Units k Rev $m Units k Rev $m Units k Rev $m
     Product Summary
         iMac                       308    $265    474   $540   300    $286
         iBook                      100     146    115    174    55      70
         Power Mac G4 Cube           29      14      0     --    12      33
         Power Mac G4               173     267    354   $686   250     470
         PowerBook                   49      84    100    252   134     341
         Peripherals,SW & Other      --     231     --   $293    --     231
 
     Total Apple                    659  $1,007  1,043  $1,945   751 $1,431
 
 
                                 CPU            CPU            CPU
     Geographic Segments        Units k Rev $m Units k Rev $m Units k Rev $m
         Americas                   329   $513    541   $989   407     $767
         Europe, Middle East,
          Africa                    230    326    275    469   199     355
         Japan                       61     84    174    349   107     214
         Asia Pacific                39     50     53     92    38      64
     Total Geographic Segments      659   $973  1,043 $1,899   751  $1,400
 
 
                              Apple Computer, Inc.
                               Q2'01 Summary Data
 
                                          Sequential Change   Year/Year Change
                                           Units   Revenue    Units   Revenue
 
     Product Summary
           iMac                                -3%       8%     -37%     -47%
           iBook                              -45%     -52%     -52%     -60%
           Power Mac G4 Cube                  -59%     136%      NM       NM
           Power Mac G4                        45%      76%     -29%     -31%
           PowerBook                          173%     306%      34%      35%
           Peripherals,SW & Other              --        0%      --      -21%
 
     Total Apple                               14%      42%     -28%     -26%
 
                                          Sequential Change  Year/Year Change
     Geographic Segments                    Units   Revenue   Units   Revenue
           Americas                            24%      50%     -25%     -22%
           Europe, Middle East, Africa        -13%       9%     -28%     -24%
           Japan                               75%     155%     -39%     -39%
           Asia Pacific                        -3%      28%     -28%     -30%
     Total Geographic Segments                 14%      44%     -28%     -26%
 
 SOURCE  Apple Computer Inc.