10-QPeriod: Q1 FY2003

Apple Inc. Quarterly Report for Q1 Ended Dec 28, 2002

Filed February 10, 2003For Securities:AAPL

Summary

Apple Inc. (AAPL) reported its financial results for the quarter ended December 28, 2002. The company experienced a net loss of $8 million for the quarter, a significant decrease from the $38 million net income reported in the same period last year. This downturn was driven by a decrease in gross margin to 27.6% from 30.7% year-over-year, largely due to aggressive pricing on newer Macintosh models and a higher mix of lower-margin consumer products. Despite the net loss, net sales saw a 7% increase year-over-year, reaching $1.47 billion, boosted by strong performance in peripherals, software, and particularly the Retail segment which saw a 208% increase in net sales. The company also continues to maintain a strong liquidity position, with cash and cash equivalents and short-term investments totaling $4.46 billion, and generated positive cash flow from operations of $110 million. Management anticipates a slight profit for the next quarter, indicating a potential stabilization after this period of loss.

Key Highlights

  • 1Net loss of $8 million for the quarter, compared to a net income of $38 million in the prior year's comparable quarter.
  • 2Net sales increased by 7% to $1.47 billion, driven by growth in peripherals, software, and the Retail segment.
  • 3Gross margin decreased to 27.6% from 30.7% year-over-year, attributed to pricing strategies and product mix.
  • 4The Retail segment experienced significant growth, with net sales rising 208% to $148 million.
  • 5Cash, cash equivalents, and short-term investments remained strong at $4.46 billion.
  • 6Generated $110 million in cash from operating activities.
  • 7Anticipates a slight profit in the upcoming second quarter of 2003.

Frequently Asked Questions

Apple reported a net loss of $8 million for the quarter ended December 28, 2002. This is a decrease from the net income of $38 million reported for the same period in the prior year.

Net sales increased by 7% year-over-year, reaching $1.47 billion for the quarter ended December 28, 2002. This growth was driven by increases in peripherals, software, and a significant expansion in the Retail segment.

Apple maintained a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $4.46 billion as of December 28, 2002.

For the second quarter of 2003, Apple expects net sales and gross margin to be relatively flat compared to the first quarter. Operating expenses are projected to decline slightly, leading to an expectation of a slight profit for the second quarter.