Apple today announced preliminary financial results for its fiscal 2006 fourth quarter ended September 30, 2006. These preliminary results may be subject to significant adjustment as a result of a likely restatement of historical results.
The Company posted revenue of $4.84 billion and net quarterly profit of $546 million, or $.62 per diluted share. These results compare to revenue of $3.68 billion and net profit of $430 million, or $.50 per diluted share, in the year-ago quarter. Gross margin was 29.2 percent, up from 28.1 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.
Apple shipped 1,610,000 Macintosh computers and 8,729,000 iPods during the quarter, representing 30 percent growth in Macs and 35 percent growth in iPods over the year-ago quarter.
“This strong quarter caps an extraordinary year for Apple. Selling more than 39 million iPods and 5.3 million Macs while performing an incredibly complex architecture transition is something we are all very proud of,” said Steve Jobs, Apple’s CEO, in the press release. “Looking forward, 2007 is likely to be one of the most exciting new product years in Apple’s history.”
“We are pleased to have finished the year with over $10 billion in cash and to have increased annual revenue by $11 billion in the last two years,” said Peter Oppenheimer, Apple’s CFO, in the press release. “Looking ahead to the first fiscal quarter of 2007, we expect revenue of $6.0 to $6.2 billion and earnings per diluted share of $.70 to $.73.”
MacDailyNews Note: Analysts surveyed by Thomson First Call had forecast Apple to earn 51 cents a share on revenue of $4.67 billion.
Apple’s 2006 earnings and unit sales information, Q1-Q4:
• Q1 (ended 12/31/05): revenue of $5.75 billion, net quarterly profit of $565 million, 1.254 million Macs, 14.043 million iPods
• Q2 (ended 04/01/06): revenue of $4.36 billion, net quarterly profit of $410 million, 1.112 million Macs, 08.526 million iPods
• Q3 (ended 07/01/06): revenue of $4.37 billion, net quarterly profit of $472 million, 1.327 million Macs, 08.111 million iPods
• Q4 (ended 09/30/06): revenue of $4.84 billion, net quarterly profit of $546 million, 1.610 million Macs, 08.729 million iPods
In total for FY 2006, Apple has posted revenue of $19.32 billion, net profit of $1.993 billion, and sold 5,303,000 Macs and 39,409,000 iPods.
For reference, Apple’s Q4 2005:
• Q4 (ended 09/24/05): revenue of $3.68 billion, net quarterly profit of $430 million, 1.236 million Macs, 06.451 million iPods
Via Apple’s Press Release: Results Subject to Significant Adjustment
As previously announced on October 4, 2006, an independent committee investigating Apple’s stock option practices has reported its findings, which are under review by the Company and its independent auditors. The investigation determined, among other things, that stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants for accounting purposes. As a result, management continues to believe, and the audit committee agrees, that Apple will likely need to restate its historical financial statements to record non-cash charges for compensation expense and related cash and non-cash tax adjustments relating to past stock option grants. The Company and its independent auditors are reviewing accounting guidance regarding stock option grants recently published by the SEC, and have not yet determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement. Under applicable accounting standards, such compensation expense generally reflects the difference between an option’s exercise price and the market price of the Company’s stock at the measurement date, the point at which the terms of the option grant were actually finalized. According to the recent SEC guidance, companies must evaluate stock option grants in light of all relevant facts, circumstances and patterns of conduct to determine whether grants were actually finalized on the stated grant dates. Evidence of a practice that certain grants were not finalized on the stated grant date may require a conclusion that the grant date is not the measurement date for other grants as well. Therefore, it is possible that the Company and its independent auditors could conclude that a larger number of grant dates than previously identified could have a measurement date that differs from the grant date, which could result in significant additional non-cash stock-based compensation expense. Such charges may result in material changes to the Company’s financial statements, including those covering the periods presented in this release.