Apple reports record profit of $1 Billion; Revenue exceeds $7 Billion

CUPERTINO, California—January 17, 2007—Apple® today announced financial results for its fiscal 2007 first quarter ended December 30, 2006. The Company posted record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share. These results compare to revenue of $5.7 billion and net quarterly profit of $565 million, or $.65 per diluted share, in the year-ago quarter. Gross margin was 31.2 percent, up from 27.2 percent in the year-ago quarter. International sales accounted for 42 percent of the quarter’s revenue.

Apple shipped 1,606,000 Macintosh® computers and 21,066,000 iPods during the quarter, representing 28 percent growth in Macs and 50 percent growth in iPods over the year-ago quarter.

“We are incredibly pleased to report record quarterly revenue of over $7 billion and record earnings of $1 billion,” said Steve Jobs, Apple’s CEO. “We’ve just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone.”

“We generated over $1.75 billion in cash during the quarter to end with $11.9 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2007, we expect revenue of $4.8 to $4.9 billion and earnings per diluted share of $.54 to $.56.”

Apple will provide live streaming of its Q1 2007 financial results conference call utilizing QuickTime®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PST on Wednesday, January 17, 2007 at apple.com/quicktime/qtv/earningsq107/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at apple.com/quicktime.

Some hilights:

• Net income of $1 Billion, up 78% from last year's quarter.
• Mac products account for 43% of total quarterly revenue, with 1.6 million Macs sold. MacBook and MacBook Pros demand was particularly strong. 65% of total Macs were portable.
• 21.1 million iPods were sold, representing 50% growth over year ago quarter. Despite Microsoft's introduction of the Zune, the iPod retained leadership position with 72% marketshare for MP3 Players.
• 29% growth in "other" music revenue - primarily iTunes with over 2 billion songs sold. iTune Music sales have 85% marketshare for legal downloads.
• Apple now has 170 retail stores, including 5 opened during the quarter.
• Outlook for March Quarter: Targetting $4.8-4.9 Billion in Revenue.