Apple Reports Third Quarter Profit of $203 Million
40 Percent Unit Growth Outpaces Industry Average
Consolidated Statements
CUPERTINO, California-July 14, 1999-AppleŽ today announced financial results for its fiscal 1999 third quarter which ended June 26, 1999. For the quarter, the Company posted a net profit of $203 million, or $1.20 per diluted share. These results compare to a net profit of $101 million, or $.65 per diluted share, achieved in the year-ago quarter. Revenues for the quarter were $1.56 billion, up 11 percent from the year-ago quarter, and gross margins were 27.4 percent, up from 25.7 percent in the year-ago quarter. International sales accounted for 45 percent of the quarter's revenues.
The current quarter's results included an $89 million after tax gain from the sale of 10 million shares of ARM Holdings plc. Without this non-recurring item, the Company's net income for the quarter would have been $114 million or $.69 per diluted share.
Strong sales of iMac(tm) drove overall unit growth 40 percent over the prior year. This compares favorably to IDC's worldwide industry growth rate forecast of 21 percent.
"We are delighted to report our seventh consecutive profitable quarter," said Steve Jobs, Apple's interim CEO. "Apple is growing faster than the industry, driven by the continued success of iMac in our consumer and education markets."
"Financial highlights for the quarter include an ending cash balance of over $3.1 billion, the successful conversion of $661 million of debt into stock, and an ending inventory balance of less than one day, again beating Dell," said Fred Anderson, Apple's CFO.
Apple also announced today a plan to repurchase up to $500 million of its common stock.
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 products and successful technological innovations to the marketplace; the ability of the Company to successfully evolve its operating system, and impact on the Company's business due to internal systems or systems of suppliers, infrastructure providers and other third parties adversely affected by year 2000 problems. 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 1998 fiscal year, and the Company's Form 10-Q for the quarter ended June 26, 1999, to be filed with the SEC.
Apple Computer, Inc. ignited the personal computer revolution in the 1970s with the Apple II, and reinvented the personal computer in the 1980s with the Macintosh. Apple is now recommitted to its original mission-to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons and consumers in over 140 countries around the world.
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