Apple Reports Second Quarter Profit of $40 Million

CUPERTINO, California—April 17, 2002—Apple® today announced financial results for its fiscal 2002 second quarter ended March 30, 2002. For the quarter, the Company posted a net profit of $40 million, or $.11 per diluted share. These results compare to a net profit of $43 million, or $.12 per diluted share, in the year ago quarter. Revenues for the quarter were $1.5 billion, up 4 percent from the year ago quarter, and gross margins were 27.4 percent, compared to 26.9 percent in the year ago quarter. International sales accounted for 45 percent of the quarter’s revenues.

Apple shipped 813 thousand Macintosh® units during the quarter, up 8% from the year ago quarter.

“We’ve experienced incredible demand for the new flat screen iMac and shipped 220,000 this quarter. Feedback from customers using them has been off the charts—we’ve clearly got a winner here,” said Steve Jobs, Apple’s CEO. “Looking forward, we’re making great progress on our transition to Mac OS X, we have some remarkable new products in development, and we plan to open an additional 20 Apple retail stores by the end of this calendar year.”

“We’re pleased to have delivered solid results while executing a challenging product transition,” said Fred Anderson, Apple’s CFO. “Our balance sheet remains very strong with $4.3 billion in cash. We are targeting June quarter revenues to be up sequentially to about $1.6 billion and EPS to be flat to up slightly compared with the March quarter.”

Apple will provide live streaming of its Q2 2002 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 2:30 p.m. PT on Wednesday, April 17, 2002 at https://www.apple.com/quicktime/qtv/earningsq202/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.

Except for the historical information contained herein, the statements in this press release are forward-looking statements that involve risks and uncertainties. Potential risks and uncertainties include, without limitation, 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 programs, 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; 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; 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 or quantity of products manufactured; 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 2001 fiscal year, and the Company’s Form 10-Q for the quarter ended March 30, 2002 to be filed with the SEC.

Apple, the Apple logo, Macintosh, Mac OS, iMac and QuickTime are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners.