|
Apple blows away estimates
|
 |
July 15, 1998: 8:25 p.m. ET
Strong G3, Powerbook sales lead to blockbuster third quarter
|
NEW YORK (CNNfn) - Apple Computer Inc. trounced Wall Street's estimates Wednesday, earning $101 million in its fiscal third quarter.
The profit, which equaled 65 cents a share, marked the first time in three years that the company has stitched together three straight profitable quarters.
Excluding one-time items, Apple earned $75 million, or 50 cents a diluted share in the three months ended in June, well above Wall Street's estimate of 33 cents a share.
In the year ago period, Apple lost $56 million, or 44 cents a share.
Apple's results were particularly noteworthy because they were achieved despite a drop in revenues. Apple posted revenues of $1.4 billion compared to $1.7 billion a year ago.
Apple's interim Chief Executive Officer Steve Jobs attributed the turnaround to the wide acceptance of its new models.
"Apple had a terrific quarter -- we sold a record number of Power Macintosh G3 computers, customers love our new PowerBooks, Apple earned its highest profit in years and we ended the quarter with the lowest inventory level among the major PC players," Jobs said.
Apple's results were announced after the market close. In after-hours trading, Apple (AAPL) shares climbed to 38, up from its New York close of 34-7/16.
Analysts were impressed by the news. Daniel Kunstler, technology analyst at J.P. Morgan & Co., characterized the results as 'stunning.'
"It truly is stunning that they should get that far ahead of what all of us expected. They were really able to do it on the margins," he said.
The company posted gross margins of 25.7 percent, a three-year quarterly high. Apple attributed the gains to a high mix of more expensive Power Mac notebooks and G3 desktop computers.
Looking ahead, Apple Chief Financial Officer Fred Anderson said the company's biggest challenge is pulling off a successful launch of the iMac.
"We know that we will have strong demand this quarter. Our challenge will be to ramp up production as quickly as possible," he said.
The iMac is Apple's newest computer which is targeting the consumer market. The $1,299 system comes with a 233-megahertz G3 processor.
The downside of the iMac's lower selling price will be a slight decline in gross margins and increased sales and marketing expenses.
"We continue to look toward the December quarter as our first opportunity for year-over-year (revenue) growth which we expect to turn into unit growth," Anderson said.
For the first nine months of its fiscal year, Apple has earned $203 million, or $1.40 a diluted share compared to a loss of $884 million, or $7.04 a share, a year ago.
|
|
|
|
|
|
Apple Computer
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
