APPLE COMPUTER: Apple reports third quarter profit of $101 million

M2 Presswire

July 17, 1998

   Apple Computer, Inc. announced a profit of $101 million, or $.65 per diluted share, for the Company's fiscal 1998 third quarter ended June 26, 1998. These results compare to a profit of $55 million, or $.38 per diluted share, achieved in the March 1998 quarter. Revenues for the quarter were $1.4 billion, equal to revenues of the prior quarter, and gross margins were 25.7 percent, up from 24.8 percent in the prior quarter. International sales accounted for 43 percent of the quarter's revenues.

   The current quarter's results included a $26 million net favorable impact from non-recurring items, including an after-tax gain of $33 million related to the initial public offering of ARM Holdings plc., in which the Company is a shareholder, and a $7 million charge for purchased in-process research and development related to the acquisition of technology from Macromedia, Inc. Without these non-recurring items, the Company's net income for the quarter would have been $75 million, or $.50 per diluted share.

   "Apple had a terrific quarter - we sold a record number of Power Macintosh G3 computers, customers love our new PowerBooks, Apple earned its highest profits in years, and we ended the quarter with the lowest inventory level among the major PC players," said Apple's interim CEO Steve Jobs. "Looking forward, Apple's improved operational efficiency has paved the way for us to aggressively reenter the consumer market with iMac on August 15."

"Apple's three consecutive quarters of profitability and improved asset management have made Apple much stronger financially," said Apple's CFO Fred Anderson. "We have nearly $2 billion in cash and short-term investments, and we believe we have the infrastructure in place to support our upcoming reentry into the consumer market."

   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 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; and the ability of the company to successfully evolve its operating system.

   More information on potential factors that could affect the Company's financial results is included in the Company's public reports filed with the SEC, including the Company's Form 10-K for the 1997 fiscal year, the Company's Form 10-Q for the first and second fiscal quarters, and the Company's Form 10-Q for the third fiscal quarter, to be filed with the SEC.

   The Apple logo is a registered trademark of Apple Computer, Inc. Apple, Macintosh, PowerBook and Apple Store are trademarks of Apple Computer, Inc., registered in the U.S. and other countries. All other brand names mentioned are trademarks or registered trademarks of their respective holders and are hereby acknowledged.