Summary
For the third quarter ended June 29, 2002, Apple Inc. reported net sales of $1.429 billion, a slight decrease of 3% compared to the same period in the previous year. Net income for the quarter was $32 million, or $0.09 per diluted share, down from $61 million, or $0.17 per diluted share, in the prior year's comparable quarter. This decline was primarily attributed to weaker than expected sales in Europe and Japan, and a softening in the U.S. consumer and education markets. While gross margin saw a year-over-year decrease to 27.4% due to higher component costs and a shift in product mix towards lower-margin consumer systems, operating expenses were managed effectively, with a decrease in both Research & Development and Selling, General & Administrative expenses compared to the prior year. The company's balance sheet showed total assets of $6.293 billion and total liabilities of $2.227 billion, resulting in shareholders' equity of $4.066 billion. Apple maintained a strong liquidity position with $1.246 billion in cash and cash equivalents and $3.060 billion in short-term investments. The company highlighted new product introductions, including Xserve, eMac, and updated iMac and PowerBook lines, alongside the upcoming Mac OS X "Jaguar" release, indicating continued investment in innovation despite prevailing weak market conditions. The outlook for the fourth quarter of 2002 anticipates relatively flat sales and a slight profit before non-recurring charges, with a cautious view on the global personal computer market's recovery.
Key Highlights
- 1Net sales for the third quarter of fiscal year 2002 were $1.429 billion, a 3% decrease year-over-year.
- 2Net income for the quarter was $32 million ($0.09 per diluted share), down from $61 million ($0.17 per diluted share) in the prior year's quarter.
- 3Gross margin declined to 27.4% from 29.4% in the prior year's quarter, impacted by higher component costs and product mix.
- 4Operating expenses were managed, with R&D down 5% and SG&A down 3% year-over-year for the quarter.
- 5The company saw weakness in sales in Europe and Japan, and the U.S. education and consumer markets.
- 6Apple introduced new products including Xserve, eMac, and updated iMac and PowerBook lines, demonstrating continued product innovation.
- 7The company maintained a strong liquidity position with $1.246 billion in cash and cash equivalents and $3.060 billion in short-term investments as of June 29, 2002.