EX-99.1 2 dex991.htm TEXT OF PRESS RELEASE ISSUED BY APPLE INC. ON JANUARY 18, 2011 Text of press release issued by Apple Inc. on January 18, 2011

Exhibit 99.1

Apple Reports First Quarter Results

Record Mac, iPhone, iPad Sales Drive Highest Revenue and Earnings Ever

Revenue Grows 71 Percent; Earnings Grow 78 Percent

CUPERTINO, California—January 18, 2011—Apple® today announced financial results for its fiscal 2011 first quarter ended December 25, 2010. The Company posted record revenue of $26.74 billion and record net quarterly profit of $6 billion, or $6.43 per diluted share. These results compare to revenue of $15.68 billion and net quarterly profit of $3.38 billion, or $3.67 per diluted share, in the year-ago quarter. Gross margin was 38.5 percent compared to 40.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

Apple sold 4.13 million Macs during the quarter, a 23 percent unit increase over the year-ago quarter. The Company sold 16.24 million iPhones in the quarter, representing 86 percent unit growth over the year-ago quarter. Apple sold 19.45 million iPods during the quarter, representing a seven percent unit decline from the year-ago quarter. The Company also sold 7.33 million iPads during the quarter.

“We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales,” said Steve Jobs, Apple’s CEO. “We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on.”

“We couldn’t be happier with the performance of our business, generating $9.8 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2011, we expect revenue of about $22 billion and we expect diluted earnings per share of about $4.90.”

Apple will provide live streaming of its Q1 2011 financial results conference call beginning at 2:00 p.m. PST on January 18, 2011 at www.apple.com/quicktime/qtv/earningsq111. 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 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 Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 25, 2010 and its Form 10-Q for the quarter ended December 25, 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 is reinventing 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.

© 2011 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.


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


     Three Months Ended  
     December 25,
     December 26,

Net sales

   $ 26,741       $ 15,683   

Cost of sales (1)

     16,443         9,272   

Gross margin

     10,298         6,411   

Operating expenses:


Research and development (1)

     575         398   

Selling, general and administrative (1)

     1,896         1,288   

Total operating expenses

     2,471         1,686   

Operating income

     7,827         4,725   

Other income and expense

     136         33   

Income before provision for income taxes

     7,963         4,758   

Provision for income taxes

     1,959         1,380   

Net income

   $ 6,004       $ 3,378   

Earnings per common share:



   $ 6.53       $ 3.74   


   $ 6.43       $ 3.67   

Shares used in computing earnings per share:



     919,294         903,542   


     933,154         919,783   
(1) Includes stock-based compensation expense as follows:      

Cost of sales

   $ 52       $ 37   

Research and development

   $ 113       $ 74   

Selling, general and administrative

   $ 134       $ 94   

Apple Inc.


(in millions, except share amounts)


     December 25,
     September 25,

Current assets:


Cash and cash equivalents

   $ 10,734       $ 11,261   

Short-term marketable securities

     16,243         14,359   

Accounts receivable, less allowances of $62 and $55, respectively

     6,027         5,510   


     885         1,051   

Deferred tax assets

     1,724         1,636   

Vendor non-trade receivables

     4,847         4,414   

Other current assets

     3,467         3,447   

Total current assets

     43,927         41,678   

Long-term marketable securities

     32,730         25,391   

Property, plant and equipment, net

     5,868         4,768   


     741         741   

Acquired intangible assets, net

     522         342   

Other assets

     2,954         2,263   

Total assets

   $ 86,742       $ 75,183   

Current liabilities:


Accounts payable

   $ 14,301       $ 12,015   

Accrued expenses

     5,953         5,723   

Deferred revenue

     3,541         2,984   

Total current liabilities

     23,795         20,722   

Deferred revenue – non-current

     1,216         1,139   

Other non-current liabilities

     7,065         5,531   

Total liabilities

     32,076         27,392   

Commitments and contingencies


Shareholders’ equity:


Common stock, no par value; 1,800,000,000 shares authorized; 921,035,475 and 915,970,050 shares issued and outstanding, respectively

     11,502         10,668   

Retained earnings

     43,050         37,169   

Accumulated other comprehensive income/(loss)

     114         (46

Total shareholders’ equity

     54,666         47,791   

Total liabilities and shareholders’ equity

   $ 86,742       $ 75,183   

Apple Inc.


(in millions)


     Three Months Ended  
     December 25,
    December 26,

Cash and cash equivalents, beginning of the period

   $ 11,261      $ 5,263   

Operating activities:


Net income

     6,004        3,378   

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


Depreciation, amortization and accretion

     356        209   

Stock-based compensation expense

     299        205   

Deferred income tax expense

     823        425   

Changes in operating assets and liabilities:


Accounts receivable, net

     (517     271   


     166        (121

Vendor non-trade receivables

     (433     (95

Other current and non-current assets

     (558     (369

Accounts payable

     2,346        956   

Deferred revenue

     634        606   

Other current and non-current liabilities

     653        316   

Cash generated by operating activities

     9,773        5,781   

Investing activities:


Purchases of marketable securities

     (19,575     (12,922

Proceeds from maturities of marketable securities

     3,279        6,216   

Proceeds from sales of marketable securities

     6,853        3,199   

Payments for acquisition of property, plant and equipment

     (1,214     (376

Payments for acquisition of intangible assets

     (49     (5


     (23     (70

Cash used in investing activities

     (10,729     (3,958

Financing activities:


Proceeds from issuance of common stock

     208        374   

Excess tax benefits from stock-based compensation

     454        252   

Taxes paid related to net share settlement of equity awards

     (233     (103

Cash generated by financing activities

     429        523   

(Decrease)/increase in cash and cash equivalents

     (527     2,346   

Cash and cash equivalents, end of the period

   $ 10,734      $ 7,609   

Supplemental cash flow disclosure:


Cash paid for income taxes, net

   $ 826      $ 980