graphic
News > Technology
Apple chews up estimates
April 18, 2001: 6:46 p.m. ET

Computer maker beats Street by 10 cents per share on revenue of $1.43B
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Apple Computer Inc. on Wednesday turned in a quarterly profit much higher than expected on the strength of new products including a slim laptop computer and its Mac OS X operating system.

The company whose Macintosh operating system and computer systems compete against Windows-based PCs, said it earned $40 million, or 11 cents per share, during the quarter ended March 31.

That's a full dime better than the penny-per-share share profit analysts polled by earnings tracker First Call had expected the company to report, and 82 percent below the $233 million or 44 cents per share it reported during the same period a year earlier.

Apple's revenue for the quarter, its fiscal second, fell 26.9 percent to $1.43 billion from $1.95 billion during the same quarter a year ago. Analysts had expected an annual revenue decline nearer 30.8 percent, according to the First Call survey.

Shares of Apple (AAPL: up $2.39 to $22.79, Research, Estimates) rose on Nasdaq ahead of the earnings results, which were released after the closing bell. They climbed $3.36 to $26.15 in after-hours trade following the results.

The company has been struggling in recent months after a series of missteps which last quarter resulted in its first operating loss in three years. Executives at Apple blamed the shortfall on the swift decline in the market for computers, but acknowledged that their own strategic errors played a part as well.

graphic  
 
They said Apple's systems had fallen behind the competition in several key areas, including higher processor speeds and writeable CD-ROM drives. The company also lost its edge in education sales, a market that used to be an unquestioned Apple stronghold, to Dell Computer.

Apple executives also said they thought consumers may have been postponing purchasing new Apple computers until the final version of its latest operating system, called OS X, was released.

In response to those issues, the company has taken a number of steps, including releasing several new products, including: a new "ultrathin" notebook computer; a PowerMac G4 cube, its high-end system, with a 733 MHz processor; making systems available with writeable CD-ROM drives; and introducing the OS X operating system, which began shipping last month.

When they reported the company's fiscal first-quarter results in mid-January, Apple executives told analysts to expect Apple to log a "slight profit" in the second quarter. Scores of technology companies came out with revised financial guidance during the course of the last three months, but Apple was not among them.

The company said that it shipped 751,000 Macintosh units during the quarter, which ended March 31, and had reached its goal of cutting sales channel inventories to four weeks of sales ahead of schedule.

  graphic
Apple said stronger-than-expected sales of new products, including the PowerBook G4, seen here, contributed to its return to profitability. (Courtesy/Apple)
 
Apple executives attributed the faster-than-expected recovery in large part to the launch of their new products, including the PowerBook G4, an ultrathin notebook computer, as well as strong demand for the OS X operating system. The company said it shipped 115,000 of the new PowerBook notebooks during the quarter.

"We feel very good about delivering solid profitability while reaching our goal of 4 weeks of channel inventory ahead of schedule," Fred Anderson, Apple's chief financial officer, said in a statement.

For the second half of the fiscal year, Anderson said Apple is aiming to generate total sales of between $3.2 billion and $3.4 billion during the second half of the fiscal year ending in September, and expects profitability to improve in each of the remaining two quarters.

So far this fiscal year, Apple has reported total revenue of $2.4 billion. If its sales for the year were to come in on the high end of its new target, the company would fall just shy of the $5.9 billion Wall Street previously had expected. That's the consensus revenue estimate of seven analysts polled by First Call. graphic





graphic