Apple meets Wall Street expectations
Thursday, January 17th 2002, 12:00 am
By: News On 6
CUPERTINO, California (AP) _ Shares of Apple Computer Inc. rose nearly 5 percent after the computer maker reported first-quarter profits in line with Wall Street expectations.
For the three months ended Dec. 29, the Cupertino-based company reported net income of dlrs 38 million, or 11 cents a share, compared with a loss of dlrs 195 million, or 58 cents a share, in the year-ago quarter, which included one-time investment gains and some accounting adjustments.
The company said the first-quarter results included a dlrs 24 million restructuring charge and a dlrs 23 million gain from equity investments. Those nonrecurring items did not affect its earnings per share, the company said.
Wall Street analysts surveyed by Thomson Financial/First Call predicted earnings of 11 cents per share.
Revenue for the quarter was dlrs 1.38 billion, slightly below the Wall Street estimate of dlrs 1.43 billion and the company's own estimate of dlrs 1.4 billion. Compared to the year-ago period, it was up 37 percent from slightly more than dlrs 1 billion.
Apple released its results Wednesday after the markets closed, and shares jumped 96 cents to dlrs 21.74 in after-hours trading on the Nasdaq Stock Market. In regular trading, the stock fell 92 cents to close at dlrs 20.78.
Apple officials attributed the revenue shortfall to depressed sales of its old-model iMacs and widespread speculation that Apple would unveil a new iMac in January, which it did. Purchases from the education sector also slowed as schools deferred spending amid government funding concerns, the company said.
In all, the company said it shipped a total of 746,000 Macintosh units during the quarter.
Apple said it expects second-quarter revenues to be up sequentially to about dlrs 1.5 billion, but that earnings per share would be approximately flat with the first quarter because of one-time costs associated with the production of the new iMacs.
The personal computer industry has been struggling with the economic recession. Analysts say a recovery isn't expected until 2003.
Still, Apple has continued to forge ahead with product rollouts and upgrades.
``We're assuming no change in the economy, and the (revenue) increase we're looking at will be driven by internal Apple factors, its strong line of products,'' chief financial officer Fred Anderson said in an interview.
Last year, the company introduced Mac OS X, an overhauled operating system, new laptops and the iPod, a portable audio player and Apple's first foray in consumer electronics.
The iPods are ``wildly popular'' with more than 125,000 units sold in two months, the company said.
At the MacWorld Expo in San Francisco last week, the company introduced the newfangled iMac. It also enhanced its iBook line of laptops and introduced a new photo management application called iPhoto _ which rounds out the company's strategy to make its computers a digital hub to which cameras, music players and other devices can be connected.
It remains to be seen whether the new iMac will take off as did its predecessor, which sold 6 million units in three years. The flagship model starts selling later this month for dlrs 1,799.
Company officials said initial orders of the new iMacs have exceeded their expectations _ reaching levels higher than any product the company has launched since the iMac introduction in 1998.
The company also last year opened 27 retail stores _ 19 of them during the last quarter _ and plans to open more this year. Though some did not open until late in the quarter, the retail stores in all generated dlrs 48 million in revenue for the quarter, the company said.
Apple cited a December store customer survey indicating 40 percent of its computer sales were to non-Macintosh _ and most likely Microsoft Windows and Intel chip-based _ owners.
Analysts say the robust store sales and product rollouts, including more to come later this year, all bode well for Apple, which is trying to surpass the 5 percent share it has of the total PC market.
``The average consumer is getting more computer literate nowadays and going from one operating system to another is not as difficult as believed,'' said Brett Miller, analyst with A.G. Edwards & Sons, Inc. ``And consumers buy Mac because it's cool, and as long as they're putting out cool products, they're doing fine.''