Apple Reports Second Quarter Results

Apple today announced financial results for its fiscal 2005 second quarter which ended on March 26th, 2005. For the quarter, the Company posted a net profit of US$290 million (£153.6m*), or $0.34 per diluted share. These results compare to a net profit of US$46 million, or $0.06 per diluted share, in the year-ago quarter. Revenue for the quarter was US$3.24 billion (£1.72bn*), up 70 percent from the year-ago quarter. Gross margin was 29.8 percent, up from 27.8 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter's revenue.

Apple shipped 1,070,000 Macintosh units and 5,311,000 iPods during the quarter, representing a 43 percent increase in CPU units and a 558 percent increase in iPods over the year-ago quarter.

“We are delighted to report a record second quarter for Apple in both revenue and earnings”, said Steve Jobs, Apple's CEO. “Apple is firing on all cylinders and we have some incredible new products in the pipeline for the coming year, starting with Mac OS X Tiger later this month”.

“We're very pleased to report 70 percent revenue growth and a 530 percent increase in net income”, said Peter Oppenheimer, Apple's CFO. “Looking ahead to the third quarter of fiscal 2005, we expect revenue of about US$3.25 billion and earnings per diluted share of about $0.28”.

This press release contains forward-looking statements about future products and the Company's estimated revenue and earnings for the third quarter of fiscal 2005. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include 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 programmes, 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, including the timely resolution of manufacturing issues associated with the G5 microprocessors used in many of the Company's Macintosh systems; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; possible disruption in commercial activity as a result of natural disasters or major health concerns including epidemics; risks associated with the Company's retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; 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 reliance on the availability of third-party music content, and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. 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 25th, 2004, the Company's Form 10-Q for the quarter ended December 25th, 2004, and the Company's Form 10-Q for the quarter ended March 26th, 2005 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 Contacts:
Apple UK and Ireland Public Relations
Email: media.uk@apple.com
Phone: +44 (0)20 8218 1440