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Apple Reports First Quarter Results
Best Quarterly Revenue & Earnings in Apple History
Mac, iPod & iPhone Sales Break Previous Records
CUPERTINO, Calif., Jan. 22 2008 - Apple® today announced financial results for its fiscal 2008 first quarter ended December 29, 2007. The Company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share. These results compare to revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 31.2 percent in the year-ago quarter. International sales accounted for 45 percent of the quarter's revenue.
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Apple shipped 2,319,000 Macintosh® computers, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter. The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone(TM) sales were 2,315,000.
"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks."
"Apple's revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter's record-breaking results," said Peter Oppenheimer, Apple's CFO. "Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding an ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94."
Apple will provide live streaming of its Q1 2008 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. PST on Tuesday, January 22, 2008 at http://www.apple.com/quicktime/qtv/earningsq108/ and will also be available for replay.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except share
and per share amounts)
Three Months Ended
December 29, 2007
December 30, 2006
Net
sales $9,608 $7,115
Cost of sales (1) 6,276
4,895
Gross margin 3,332
2,220
Operating expenses:
Research and development (1)
246 184
Selling, general and
administrative (1)
960 714
Total operating
expenses 1,206 898
Operating
income 2,126 1,322
Other income and
expense 200 126
Income before provision for income
taxes 2,326
1,448
Provision for income
taxes 745 444
Net
income $1,581 $1,004
Earnings per common share:
Basic $1.81
$1.17
Diluted $1.76
$1.14
Shares used in computing earnings
per share (in thousands):
Basic 875,860
857,691
Diluted 900,054
883,297
(1) Includes stock-based
compensation
expense as follows:
Cost of sales
$18 $6
Research and development
$39 $16
Selling, general and administrative
$53 $24
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions,
except share amounts)
December 29, 2007 September 29, 2007
ASSETS:
Current assets:
Cash and cash equivalents $9,162
$9,352
Short-term investments 9,286
6,034
Accounts receivable, less allowances
of $45 and $47, respectively 1,939
1,637
Inventories
459 346
Deferred tax assets
993 782
Other current assets 4,350
3,805
Total current assets 26,189
21,956
Property, plant and equipment,
net 1,870 1,832
Goodwill
38 38
Acquired intangible assets, net
311 299
Other assets 1,631
1,222
Total
assets $30,039 $25,347
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $5,366
$4,970
Accrued expenses 5,169
4,329
Total current liabilities 10,535
9,299
Non-current liabilities 2,700
1,516
Total liabilities 13,235
10,815
Commitments and contingencies
Shareholders' equity:
Common stock, no par value;
1,800,000,000 shares authorized;
878,628,867 and 872,328,972 shares
issued and outstanding, respectively 6,046
5,368
Retained earnings 10,684
9,101
Accumulated other comprehensive income
74 63
Total shareholders'
equity 16,804 14,532
Total liabilities and
shareholders'
equity $30,039
$25,347
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
millions)
Three Months Ended
December 29, 2007
December 30, 2006
Cash and cash equivalents, beginning
of the period $9,352
$6,392
Operating Activities:
Net income 1,581
1,004
Adjustments to reconcile net income
to cash generated by operating
activities:
Depreciation, amortization, and
accretion
106 74
Stock-based compensation expense
110 46
Provision for deferred income taxes
22 73
Loss on disposition of property, plant,
and equipment
14 5
Changes in operating assets and
liabilities:
Accounts receivable, net (302)
(369)
Inventories
(113) (33)
Other current assets
(550) 36
Other assets
(253) 28
Accounts payable
484 495
Deferred revenue
1,048 199
Other liabilities
640 255
Cash generated by operating
activities 2,787
1,813
Investing Activities:
Purchases of short-term investments (6,127)
(2,581)
Proceeds from maturities of short-term
investments
2,129 934
Proceeds from sales of investments
758 655
Purchases of long-term investments
(9) -
Payment for acquisition of property,
plant, and equipment (224)
(142)
Payment for acquisition of intangible
assets (8)
(115)
Other
19 15
Cash used in investing
activities (3,462) (1,234)
Financing Activities:
Proceeds from issuance of common stock
179 101
Excess tax benefits from stock-based
compensation
315 87
Cash used to net share settle equity
awards
(9) -
Cash generated by financing
activities 485 188
(Decrease) increase in cash and cash
equivalents
(190) 767
Cash and cash equivalents, end of
the
period $9,162
$7,159
Supplemental cash flow disclosure:
Cash paid for income taxes, net $251
$114
UNAUDITED CONSOLIDATED
SCHEDULE OF DEFERRED REVENUE
(in
millions)
December 29, 2007 September 29, 2007
Deferred revenue-current:
iPhone and Apple TV $816
$346
AppleCare
467 430
Other
812 634
Total deferred revenue-current 2,095
1,410
Deferred revenue-non-current:
iPhone and Apple TV
624 290
AppleCare
529 495
Other
40 45
Total deferred revenue-non-current
1,193 830
Total deferred
revenue $3,288 $2,240
Apple
Inc.
Q1 2008 Unaudited Summary Data
Q4
2007 Q1 2007 Q1 2008
CPU Rev CPU Rev
CPU Rev
Operating Segments Units K $M Units K $M Units
K $M
Americas 965 $2,928 625 $3,521 841
$4,298
Europe 499 1,339 491 1,712
705 2,471
Japan 72 255 70 285
91 400
Retail 473 1,251 308 1,115
504 1,701
Other Segments (1) 155 444 112 482
178 738
Total Operating Segments 2,164
$6,217 1,606 $7,115 2,319 $9,608
Rev Rev Rev
Units K $M Units K $M Units
K $M
Product Summary
Desktops (2) 817 $1,195 637 $955
977 $1,515
Portables (3) 1,347 1,908 969 1,455
1,342 2,037
Subtotal CPUs 2,164 3,103 1,606 2,410
2,319 3,552
iPod 10,200 1,619 21,066 3,427
22,121 3,997
Other Music Related
Products and Services
(4) 601
634 808
iPhone and Related
Products & Services
(5) 1,119 118 - -
2,315 241
Peripherals and Other
Hardware 346
297 382
Software, Service and
Other Sales 430
347 628
Total Apple $6,217
$7,115 $9,608
Sequential Change Year/Year Change
CPU CPU
Operating Segments Units Revenue
Units Revenue
Americas -13% 47%
35% 22%
Europe 41% 85%
44% 44%
Japan 26% 57%
30% 40%
Retail 7% 36%
64% 53%
Other Segments (1) 15% 66%
59% 53%
Total Operating Segments 7% 55%
44% 35%
Sequential Change Year/Year Change
Units Revenue
Units Revenue
Product Summary
Desktops (2) 20% 27%
53% 59%
Portables (3) - 0% 7%
38% 40%
Subtotal CPUs 7% 14%
44% 47%
iPod 117% 147%
5% 17%
Other Music Related Products
and Services (4)
34% 27%
iPhone and Related Products &
Services (5) 107% 104%
NM NM
Peripherals and Other Hardware
10% 29%
Software, Service and Other Sales
46% 81%
Total Apple
55% 35%
(1) Other Segments include Asia
Pacific and FileMaker.
(2) Includes iMac, eMac, Mac mini, Mac Pro, PowerMac and Xserve
product
lines.
(3) Includes MacBook, iBook, MacBook Pro and PowerBook product
lines.
(4) Consists of iTunes Store sales, iPod services, and
Apple-branded and
third-party iPod accessories.
(5) Units consist of iPhone handset sales; Revenue is derived
from handset
sales, carrier agreements, and Apple-branded and third-party
iPhone
accessories.
NM: Not Meaningful
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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 US, UK, 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 29, 2007 and its Form 10-Q for the quarter ended December 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.
InvestorIdeas.com Disclaimer: Issuers of press releases are solely responsible for the accuracy of the content.
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 with its revolutionary iPhone.
© 2008 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.
Source: Apple
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