Apple to Report Lower than Expected Fourth Quarter Earnings

CUPERTINO, California—September 28, 2000—Apple announced that earnings for its quarter ending September 30, 2000 will be substantially below expectations due to slower than expected sales in the month of September.

The Company indicated that it expects to report revenues between $1.85 and $1.90 billion and earnings per diluted share, excluding investment gains, between $.30 and $.33 when actual results are announced on October 18, 2000.

“Three factors contributed to our revenues and earnings coming in below expectations,” said Fred Anderson, Apple’s CFO. “First, we experienced lower than expected September sales due to a business slowdown in all geographies. Second, our Education sales, which normally peak during September, were lower than expected. And third, our Power Mac G4 Cube is off to a slower than expected start, resulting in revenues below expectations. We are currently re-evaluating our plans going forward, and will provide lower growth targets for next quarter and the next fiscal year when we announce our final results on October 18.”

“We’ve clearly hit a speedbump, which will result in our earning, before investment gains, approximately $110 million rather than the expected $165 million for the September quarter,” said Steve Jobs, Apple’s CEO. “Though this slowdown is disappointing, we have so many wonderful new products and programs in the pipeline—including Mac OS X early next year—and remain positive about our future.”

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.