Apple Announces Q2 Financial Results, Net Profit of $14 Million [Updated]

| Apple Stock Watch

Apple today announced its quarterly financial results for the second quarter of the fiscal year, posting a net profit of $14 million. The company recorded some US$1.475 billion, which is down 1% from this time last year. Gross margins were 28.3%, the highest in the industry, and Apple increased its cash on hand to US$4.5 billion, up US$64 million.

Apple posted an operations loss this quarter, with profits coming from investment gains, and the one-time sale of some investment assets. In the two previous quarters, Apple posted an operational profit, but showed a loss due to one-time restructuring charges (Q1 2003) and an investment write-off (Q4 2002). This quarteris operational loss was US$4 million.

Unit sales were also down in the quarter, with Apple selling 711,000 Macs, including PowerMacs, iMacs, eMacs, iBooks, and PowerBooks. In todayis conference call, Apple CFO Fred Anderson said that demand for the 12" and 17" PowerBooks was strong, and that the company ended the quarter with a backlog of orders for the 17" unit.

Other highlights from the conference call included notes that non-US sales contributed 47% of Appleis revenues, and that sales in Japan were higher. The company has placed some 75 Apple employees in Japanese retail stores, similar to the Apple employees in CompUSAis store-within-a-store locations.

From the press release:

Apple? today announced financial results for its fiscal 2003 second quarter ended March 29, 2003. For the quarter, the Company posted a net profit of $14 million, or $.04 per diluted share. These results compare to a net profit of $40 million, or $.11 per diluted share, in the year-ago quarter. Revenues for the quarter were $1.475 billion, down 1 percent from the year-ago quarter, and gross margins were 28.3 percent, up from 27.4 percent in the year-ago quarter. International sales accounted for 47 percent of the quarteris revenues.

Apple shipped 711,000 Macintosh? units during the quarter.

"Our iyear of the notebooki is off to a great start, led by the incredible demand for our new aluminum 12-inch and 17-inch PowerBook G4s," said Steve Jobs, Appleis CEO. "This quarter over 40 percent of the Macs we shipped were notebooks -- our highest percentage ever and well ahead of the industry average."

"We are very pleased to have achieved our revenue target for the second quarter while maintaining channel inventories under 4.5 weeks," said Fred Anderson, Appleis CFO. "Continued strong asset management enabled us to increase cash to over $4.5 billion. Looking ahead to the third quarter of 2003, we expect revenue to be relatively flat with the March quarter and expect a slight profit for the quarter."

Apple 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 committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Apple will be holding a financial results conference call at 4 PM today, which can be heard live in QuickTime. Also, TMO will be providing live coverage of the conference call.

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