NEW YORK (CNNfn) - Apple Computer Inc., beset by problems in shipping its latest line of desktop personal computers, reported lower fourth-quarter operating profits Wednesday, but the results still managed to beat Wall Street's estimates.
For the fiscal quarter ended Sept. 25, the Cupertino, Calif.-based firm posted operating earnings of $90 million, or 51 cents a share. The results exceeded Wall Street's lowered expectations of 45 cents a share. Revenue dropped 14 percent to $1.34 billion.
Apple's operating profit excludes a $21 million net gain from non-recurring items. Including those figures, Apple (AAPL) recorded a profit of $111 million, or 63 cents a share.
In the year-ago quarter, Apple logged a profit of $106 million, or 68 cents a share, on $1.56 billion in revenue.
Apple shares fell 3-21/32 to close at 64-1/32 prior to the earnings announcement. Its shares jumped to 68-3/16 in after-hours trade.
Apple's fourth-quarter forecasts were cut severely after the firm warned analysts last month that it would not meet original earnings estimates of 76 cents a share because a shortage of chips would delay shipments of its new Power Mac G4 computers.
Apple said Motorola, which was the sole provider of the speedy microprocessors, had problems reaching production volume of its 500-MHz G4 chip, which was due for availability this month and is now scheduled for availability early next year.
Apple originally planned to ship Power Mac G4s in 400-MHz, 450-MHz and 500-MHz configurations. The company will now ship Power Mac G4 computers in 350-MHz, 400-MHz and 450-MHz models.
Fred Anderson, Apple chief financial officer, said the company shipped only 64,000 Power Mac G4s in the quarter, far short of its target of 150,000 unit shipments.
To accommodate the increased demand for the G4 chip, Apple said IBM (IBM) will begin manufacturing the chips in the first half of 2000 for use in Macintosh computers.
Anderson said Apple will receive chips from both Motorola and IBM, who jointly develop the PowerPC architecture. Apple did not elaborate on what percentage of the chips would be shifted to IBM.
Anderson said Apple expects to record higher first-quarter revenues both sequentially and on a year-over-year basis as the company catches up to the backlog of Power Mac G4 computers.
"With our product transitions during the September quarter behind us, and an order backlog of over $700 million, we're poised for a very strong December quarter," Anderson said.
Take on Taiwan
Analysts have speculated that the recent earthquake in Taiwan, a major source of computer components, would negatively effect Apple's business in its fiscal first quarter, particularly shipments of the new iBook portable computers.
In a conference call with analysts, Anderson said Apple suffered no structural damage to its facilities and that they were fully operational.
He added, however, that the company lost one week of production of its PowerBook and iBook portable computers.
"We expect to catch up on the backlog of the G4" in the first quarter, Anderson said. "But we will have supply constraints for the iBook."
Apple has received more than 300,000 orders for the iBook since its July introduction.
Anderson added Apple does not expect the Taiwan earthquake to have any effect on Apple's fiscal first-quarter financial results.
"Some component supplies will be impacted, but we believe the situation will be resolved well in advance of the end of the next quarter," Anderson said.
For fiscal year 1999, Apple had a net income of $601 million, or $3.61 a share, on $6.1 billion in revenue, compared with 1998 earnings of $309 million, or $2.10 a share, on $5.9 billion in revenue.