Apple Reports Fourth Quarter Results

Apple today announced financial results for its fiscal 2003 fourth quarter, which ended on September 27th, 2003. For the quarter, the Company posted a net profit of US$44 million (£26.35m*), or US$0.12 per diluted share. These results compare to a net loss of US$45 million (£26.94m*), or US$0.13 per diluted share, in the year-ago quarter. Revenues for the quarter were US$1.715 billion (£1.03bn*), up 19 percent from the year-ago quarter, and gross margins were 26.6 percent, up from 26.4 percent in the year-ago quarter. International sales accounted for 38 percent of the quarter's revenues.

The quarter's results include an after-tax investment gain of US$6 million (£3.6m*), a favourable accounting transition adjustment of US$3 million (£1.8m*) related to Apple's stock repurchase agreement, and a gain on settlement of the stock repurchase agreement of US$6 million (£3.6m*). Without these items, net income would have been US$29 million (£17.36m*), or US$0.08 per share. Management believes that presentation of results excluding these items provides meaningful supplemental information regarding the Company's operational performance.

Apple shipped 787,000 Macintosh units during the quarter, up 7 percentfrom the year-ago quarter, as well as 336,000 iPod units, up 140percent from the year-ago quarter.

“It was a great new product quarter for Apple”, said Steve Jobs, Apple's CEO. “We launched the Power Mac G5, the fastest personal computer in the world, new PowerBooks and new iPods. Plus, we're delivering Panther, the next major release of Mac OS X, later this month and we'll have some exciting news regarding our music efforts tomorrow”.

“We are very pleased to have exceeded our revenue and profit targets for the fourth quarter”, said Fred Anderson, Apple's CFO. “Our balance sheet remains strong and our working capital management is among the best in the industry. Looking ahead to the first quarter of fiscal 2004, we expect a sequential increase in revenues to about $1.9 billion and a slight sequential increase in GAAP earnings relative to the September quarter”.

For the year, the Company reported net income of US$69 million (£41.3m*) on revenues of US$6.21 billion (£3.72bn*) compared to net income of US$65 million (£38.9m*) on revenues of US$5.74 billion (£3.44bn*) in 2002.

Consolidated financial statements and a data summary for the quarter may bedownloaded from https://www.apple.com/pr/library/2003/oct/15results.html.

A QuickTime webcast of Apple's Q4 2003 financial results conference call is available on demand at www.apple.com/quicktime/qtv/earningsq403. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/ie/quicktime.

This press release contains forward-looking statements about futurerevenues, profit and products, including statements regarding delivery ofMac OS X version 10.3 “Panther”, announcements regarding the Company's music efforts and estimated revenues and earnings for the first quarter of fiscal 2004. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include continued competitivepressures in the marketplace; the effect competitive and economic factorsand the Company's reaction to them may have on consumer and business buyingdecisions with respect to the Company's products; the ability of the Company to make timely delivery of new programmes, products and successfultechnological innovations to the marketplace; the continued availability ofcertain components and services essential to the Company's businesscurrently obtained by the Company from sole or limited sources; possibledisruption in commercial activities caused by terrorist activity and armedconflict, such as changes in logistics and security arrangements, andreduced end-user purchases relative to expectations; possible disruption incommercial activity as a result of major health concerns, such as SevereAcute Respiratory Syndrome (SARS); risks associated with the Company'sretail initiative including significant investment cost, uncertain consumeracceptance and potential impact on existing reseller relationships; theeffect that the Company's dependency on manufacturing and logistics services provided by third-parties may have on the quality or quantity of products manufactured; and the ability of the Company to successfully evolve itsoperating system and attract sufficient Macintosh developers. Moreinformation on potential factors that could affect the Company's financialresults is included from time to time in the Company's public reports filedwith the SEC, including the Company's Form 10-Q for the quarter which ended on June 28th, 2003, and the Company's Form 10-K for the 2003 fiscal year to be filed with the SEC. The Company assumes no obligation to update anyforward-looking statements or information, which speak as of theirrespective dates.

* Figures based on currency exchange rates at the time of going to press; exchange rates are subject to fluctuation.

Press Contacts:
Apple UK and Ireland Public Relations
Email: media.uk@apple.com
Phone: +44 (0)20 8218 1440