EX-99.1 2 d652772dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Apple Reports First Quarter Results

iPhone and iPad Sales Drive Record Revenue and Operating Profit

CUPERTINO, California—January 27, 2014—Apple® today announced financial results for its fiscal 2014 first quarter ended December 28, 2013. The Company posted record quarterly revenue of $57.6 billion and quarterly net profit of $13.1 billion, or $14.50 per diluted share. These results compare to revenue of $54.5 billion and net profit of $13.1 billion, or $13.81 per diluted share, in the year-ago quarter. Gross margin was 37.9 percent compared to 38.6 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.

The Company sold 51 million iPhones, an all-time quarterly record, compared to 47.8 million in the year-ago quarter. Apple also sold 26 million iPads during the quarter, also an all-time quarterly record, compared to 22.9 million in the year-ago quarter. The Company sold 4.8 million Macs, compared to 4.1 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on February 13, 2014, to shareholders of record as of the close of business on February 10, 2014.

“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”

“We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion,” said Peter Oppenheimer, Apple’s CFO.

Apple is providing the following guidance for its fiscal 2014 second quarter:

 

 

revenue between $42 billion and $44 billion

 

gross margin between 37 percent and 38 percent

 

operating expenses between $4.3 billion and $4.4 billion

 

other income/(expense) of $200 million

 

tax rate of 26.2 percent

Apple will provide live streaming of its Q1 2014 financial results conference call beginning at 2:00 p.m. PST on January 27, 2014 at www.apple.com/quicktime/qtv/earningsq114. This webcast will also be available for replay for approximately two weeks thereafter.


This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation 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; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; 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; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 28, 2013 and its Form 10-Q for the quarter ended December 28, 2013 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.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Press Contact:

Steve Dowling

Apple

dowling@apple.com

(408) 974-1896

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2014 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

 

                                                 
     Three Months Ended  
     December 28,
2013
     December 29,
2012
 

Net sales

   $ 57,594       $ 54,512   

Cost of sales (1)

     35,748         33,452   
  

 

 

    

 

 

 

Gross margin

     21,846         21,060   
  

 

 

    

 

 

 

Operating expenses:

     

Research and development (1)

     1,330         1,010   

Selling, general and administrative (1)

     3,053         2,840   
  

 

 

    

 

 

 

Total operating expenses

     4,383         3,850   
  

 

 

    

 

 

 

Operating income

     17,463         17,210   

Other income/(expense), net

     246         462   
  

 

 

    

 

 

 

Income before provision for income taxes

     17,709         17,672   

Provision for income taxes

     4,637         4,594   
  

 

 

    

 

 

 

Net income

   $ 13,072       $ 13,078   
  

 

 

    

 

 

 

Earnings per share:

     

Basic

   $ 14.59       $ 13.93   

Diluted

   $ 14.50       $ 13.81   

Shares used in computing earnings per share:

     

Basic

     896,072         938,916   

Diluted

     901,452         947,217   

Cash dividends declared per common share

   $ 3.05       $ 2.65   

(1) Includes share-based compensation expense as follows:

  

Cost of sales

   $ 109       $ 85   

Research and development

   $ 289       $ 224   

Selling, general and administrative

   $ 283       $ 236   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands)

 

                                                 
     December 28,
2013
    September 28,
2013
 
ASSETS:   

Current assets:

    

Cash and cash equivalents

   $ 14,077      $ 14,259   

Short-term marketable securities

     26,634        26,287   

Accounts receivable, less allowances of $94 and $99, respectively

     14,200        13,102   

Inventories

     2,122        1,764   

Deferred tax assets

     3,742        3,453   

Vendor non-trade receivables

     10,998        7,539   

Other current assets

     8,574        6,882   
  

 

 

   

 

 

 

Total current assets

     80,347        73,286   

Long-term marketable securities

     118,131        106,215   

Property, plant and equipment, net

     15,488        16,597   

Goodwill

     2,022        1,577   

Acquired intangible assets, net

     4,105        4,179   

Other assets

     5,091        5,146   
  

 

 

   

 

 

 

Total assets

   $ 225,184      $ 207,000   
  

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

    

Accounts payable

   $ 29,588      $ 22,367   

Accrued expenses

     15,824        13,856   

Deferred revenue

     8,357        7,435   
  

 

 

   

 

 

 

Total current liabilities

     53,769        43,658   

Deferred revenue – non-current

     3,071        2,625   

Long-term debt

     16,961        16,960   

Other non-current liabilities

     21,699        20,208   
  

 

 

   

 

 

 

Total liabilities

     95,500        83,451   
  

 

 

   

 

 

 

Commitments and contingencies

    

Shareholders’ equity:

    

Common stock, no par value; 1,800,000 shares authorized; 892,447 and 899,213 shares issued and outstanding, respectively

     20,559        19,764   

Retained earnings

     109,431        104,256   

Accumulated other comprehensive income/(loss)

     (306     (471
  

 

 

   

 

 

 

Total shareholders’ equity

     129,684        123,549   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 225,184      $ 207,000   
  

 

 

   

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Three Months Ended  
     December 28,
2013
    December 29,
2012
 

Cash and cash equivalents, beginning of the period

   $ 14,259      $ 10,746   
  

 

 

   

 

 

 

Operating activities:

    

Net income

     13,072        13,078   

Adjustments to reconcile net income to cash generated by operating activities:

    

Depreciation and amortization

     2,144        1,588   

Share-based compensation expense

     681        545   

Deferred income tax expense

     1,253        1,179   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (1,098     (668

Inventories

     (358     (664

Vendor non-trade receivables

     (3,459     (2,174

Other current and non-current assets

     (319     413   

Accounts payable

     8,191        6,145   

Deferred revenue

     1,368        1,611   

Other current and non-current liabilities

     1,195        2,373   
  

 

 

   

 

 

 

Cash generated by operating activities

     22,670        23,426   
  

 

 

   

 

 

 

Investing activities:

    

Purchases of marketable securities

     (48,397     (37,192

Proceeds from maturities of marketable securities

     5,556        3,460   

Proceeds from sales of marketable securities

     30,302        23,002   

Payments made in connection with business acquisitions, net

     (525     (284

Payments for acquisition of property, plant and equipment

     (1,985     (2,317

Payments for acquisition of intangible assets

     (59     (138

Other

     5        (52
  

 

 

   

 

 

 

Cash used in investing activities

     (15,103     (13,521
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from issuance of common stock

     134        76   

Excess tax benefits from equity awards

     280        404   

Taxes paid related to net share settlement of equity awards

     (365     (534

Dividends and dividend equivalents paid

     (2,769     (2,493

Repurchase of common stock

     (5,029     (1,950
  

 

 

   

 

 

 

Cash used in financing activities

     (7,749     (4,497
  

 

 

   

 

 

 

Increase/(decrease) in cash and cash equivalents

     (182     5,408   
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

   $ 14,077      $ 16,154   
  

 

 

   

 

 

 

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 3,387      $ 1,890   

Cash paid for interest

   $ 161      $ 0