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Apple Reports Fourth Quarter ResultsQuarterly Mac Sales Set New Record
CUPERTINO, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Apple(R) 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(R) computers, representing 34 percent growth over the year-ago quarter and exceeding the previous quarterly record for Mac(R) 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(TM) 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(R), 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 http://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. (C) 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, September 30,
2007 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 September September September
29, 30, 29, 30,
2007 2006 2007 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 June March September
29, 30, 31, 30,
2007 2007 2007 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 43 383
Total deferred revenue $2,240 $1,624 $1,336 $1,101
Apple Inc.
Q4 2007 Unaudited Summary Data
Q3 2007 Q4 2006 Q4 2007
CPU Rev CPU Rev CPU Rev
Operating Segments Units K $M Units K $M Units K $M
Americas 824 $2,680 781 $2,348 965 $2,928
Europe 393 1,160 342 988 499 1,339
Japan 81 258 62 286 72 255
Retail 330 915 323 884 473 1,251
Other Segments (1) 136 397 102 331 155 444
Total Operating Segments 1,764 $5,410 1,610 $4,837 2,164 $6,217
Rev Rev Rev
Units K $M Units K $M Units K $M
Product Summary
Desktops (2) 634 $956 624 $869 817 $1,195
Portables (3) 1,130 1,577 986 1,344 1,347 1,908
Subtotal CPUs 1,764 2,533 1,610 2,213 2,164 3,103
iPod 9,815 1,570 8,729 1,559 10,200 1,619
Other Music Related
Products and Services (4) 608 452 601
iPhone and Related
Products & Services (5) 270 5 - - 1,119 118
Peripherals and Other
Hardware 308 297 346
Software, Service and
Other Sales 386 316 430
Total Apple $5,410 $4,837 $6,217
Sequential Change Year/Year Change
CPU CPU
Operating Segments Units Revenue Units Revenue
Americas 17% 9% 24% 25%
Europe 27% 15% 46% 36%
Japan - 11% - 1% 16% - 11%
Retail 43% 37% 46% 42%
Other Segments (1) 14% 12% 52% 34%
Total Operating Segments 23% 15% 34% 29%
Sequential Change Year/Year Change
Units Revenue Units Revenue
Product Summary
Desktops (2) 29% 25% 31% 38%
Portables (3) 19% 21% 37% 42%
Subtotal CPUs 23% 23% 34% 40%
iPod 4% 3% 17% 4%
Other Music Related Products and
Services (4) - 1% 33%
iPhone and Related Products &
Services (5) NM NM NM NM
Peripherals and Other Hardware 12% 16%
Software, Service and Other Sales 11% 36%
Total Apple 15% 29%
(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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