EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Apple Reports Third Quarter Results

All-Time Record Revenue

Earnings Increase 78 Percent

CUPERTINO, California—July 20, 2010—Apple® today announced financial results for its fiscal 2010 third quarter ended June 26, 2010. The Company posted record revenue of $15.7 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share. These results compare to revenue of $9.73 billion and net quarterly profit of $1.83 billion, or $2.01 per diluted share, in the year-ago quarter. Gross margin was 39.1 percent compared to 40.9 percent in the year-ago quarter. International sales accounted for 52 percent of the quarter’s revenue.

Apple sold 3.47 million Macs during the quarter, representing a new quarterly record and a 33 percent unit increase over the year-ago quarter. The Company sold 8.4 million iPhones in the quarter, representing 61 percent unit growth over the year-ago quarter. Apple sold 9.41 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter. The Company began selling iPads during the quarter, with total sales of 3.27 million.

“It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” said Steve Jobs, Apple’s CEO. “iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

“We’re really pleased to have generated over $4 billion of cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2010, we expect revenue of about $18 billion and we expect diluted earnings per share of about $3.44”

Apple will provide live streaming of its Q3 2010 financial results conference call beginning at 2:00 p.m. PDT on July 20, 2010 at www.apple.com/quicktime/qtv/earningsq310/. 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 and earnings per share. 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 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; the Company’s reliance on the availability of third-party digital content and applications; 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 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 Company’s reliance on sole service providers for iPhone® in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; 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 Company’s public reports filed with the SEC, including the Company’s Form 10-K, as amended, for the fiscal year ended September 26, 2009, its Forms 10-Q for the quarters ended December 26, 2009 and March 27, 2010, and its Form 10-Q for the quarter ended June 26, 2010 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 reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

Press Contact:

Steve Dowling



(408) 974-1896

Investor Relations Contacts:

Nancy Paxton



(408) 974-5420

Joan Hoover



(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.

© 2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and iPhone are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.


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


     Three Months Ended    Nine Months Ended
     June 26,
   June 27,
   June 26,
   June 27,

Net sales

   $ 15,700    $ 9,734    $ 44,882    $ 30,698

Cost of sales (1)

     9,564      5,751      26,710      18,581

Gross margin

     6,136      3,983      18,172      12,117

Operating expenses:


Research and development (1)

     464      341      1,288      975

Selling, general and administrative (1)

     1,438      1,010      3,946      3,086

Total operating expenses

     1,902      1,351      5,234      4,061

Operating income

     4,234      2,632      12,938      8,056

Other income and expense

     58      60      141      281

Income before provision for income taxes

     4,292      2,692      13,079      8,337

Provision for income taxes

     1,039      864      3,374      2,634

Net income

   $ 3,253    $ 1,828    $ 9,705    $ 5,703

Earnings per common share:



   $ 3.57    $ 2.05    $ 10.69    $ 6.40


   $ 3.51    $ 2.01    $ 10.51    $ 6.30

Shares used in computing earnings per share:



     912,197      893,712      907,762      891,345


     927,361      909,160      923,341      904,549
(1)  Includes stock-based compensation expense as follows:            

Cost of sales

   $ 38    $ 28    $ 112    $ 85

Research and development

   $ 80    $ 65    $ 240    $ 192

Selling, general and administrative

   $ 101    $ 86    $ 303    $ 253

Apple Inc.


(In millions, except share amounts)


          June 26,     
   September 26,

Current assets:


Cash and cash equivalents

   $ 9,705    $ 5,263

Short-term marketable securities

     14,583      18,201

Accounts receivable, less allowances of $52 in each period

     3,447      3,361


     942      455

Deferred tax assets

     1,216      1,135

Vendor non-trade receivables

     2,952      1,696

Other current assets

     3,188      1,444

Total current assets

     36,033      31,555

Long-term marketable securities

     21,551      10,528

Property, plant and equipment, net

     3,990      2,954


     714      206

Acquired intangible assets, net

     318      247

Other assets

     2,119      2,011

Total assets

   $ 64,725    $ 47,501

Current liabilities:


Accounts payable

   $ 8,469    $ 5,601

Accrued expenses

     4,452      3,852

Deferred revenue

     2,691      2,053

Total current liabilities

     15,612      11,506

Deferred revenue – non-current

     1,021      853

Other non-current liabilities

     4,981      3,502

Total liabilities

     21,614      15,861

Commitments and contingencies


Shareholders’ equity:


Common stock, no par value; 1,800,000,000 shares authorized; 913,482,347 and 899,805,500 shares issued and outstanding, respectively

     10,133      8,210

Retained earnings

     32,870      23,353

Accumulated other comprehensive income

     108      77

Total shareholders’ equity

     43,111      31,640

Total liabilities and shareholders’ equity

   $ 64,725    $ 47,501

Apple Inc.


(In millions)


     Nine Months Ended  
     June 26,
    June 27,

Cash and cash equivalents, beginning of the period

   $ 5,263      $ 11,875   

Operating activities:


Net income

     9,705        5,703   

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


Depreciation, amortization and accretion

     698        531   

Stock-based compensation expense

     655        530   

Deferred income tax expense

     1,298        772   

Loss on disposition of property, plant and equipment

     14        18   

Changes in operating assets and liabilities:


Accounts receivable, net

     (79     (264


     (487     129   

Vendor non-trade receivables

     (1,256     788   

Other current assets

     (944     62   

Other assets

     (71     (602

Accounts payable

     2,812        (648

Deferred revenue

     806        323   

Other liabilities

     (239     (293

Cash generated by operating activities

     12,912        7,049   

Investing activities:


Purchases of marketable securities

     (41,318     (34,696

Proceeds from maturities of marketable securities

     19,758        12,780   

Proceeds from sales of marketable securities

     14,048        9,117   

Purchases of other long-term investments

     (10     (61

Payments made in connection with business acquisitions, net of cash acquired

     (615     —     

Payments for acquisition of property, plant and equipment

     (1,245     (685

Payments for acquisition of intangible assets

     (63     (56


     (26     (62

Cash used in investing activities

     (9,471     (13,663

Financing activities:


Proceeds from issuance of common stock

     733        288   

Excess tax benefits from stock-based compensation

     652        124   

Taxes paid related to net share settlement of equity awards

     (384     (68

Cash generated by financing activities

     1,001        344   

Increase/(decrease) in cash and cash equivalents

     4,442        (6,270

Cash and cash equivalents, end of the period

   $ 9,705      $ 5,605   

Supplemental cash flow disclosure:


Cash paid for income taxes, net

   $ 2,657      $ 2,490