Apple Reports Record Second Quarter Results

Apple today announced financial results for its fiscal 2008 second quarter ended March 29th, 2008. The Company posted revenue of US$7.51 billion (£3.8bn*) and net quarterly profit of US$1.05 billion (£531.6m*), or $1.16 per diluted share. These results compare to revenue of US$5.26 billion and net quarterly profit of US$770 million, or $0.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter's revenue.

Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The Company sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter. Quarterly iPhone sales were 1,703,000.

“We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history”, said Steve Jobs, Apple's CEO. “With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters”.

“We're thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion”, said Peter Oppenheimer, Apple's CFO. “Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00”.

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 from the matters investigated by the special committee of the board of directors and the restatement of the Company's consolidated financial statements; unfavourable results of other 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 certain countries; 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 programmes, 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 29th, 2007, its Form 10-Q for the quarter ended December 29th, 2007, and its Form 10-Q for the quarter ended March 29th, 2008, 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.

Press Contact:
Apple
Petter Ahrnstedt
ahrnstedt.p@euro.apple.com