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Apple tops forecast
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July 17, 2001: 6:43 p.m. ET
Tops Street estimates on sales of iBook computer, sees weakness in 4Q
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NEW YORK (CNNfn) - Apple Computer Corp. reported third quarter results much stronger than Wall Street expected as sales of new products helped boost profit, but said revenue for the second half of the fiscal year could be below forecasts.
For the quarter ended June 30, Apple on Tuesday reported earnings of $61 million, or 17 cents a share, compared with earnings of $200 million, or 55 cents a share a year earlier. Analysts on average anticipated 15 cents a share, according to earnings tracker First Call.
Third quarter revenue plunged 19 percent to $1.5 billion from $1.8 billion.
The company also said there was no sign of a consumer recovery and said revenue for the second half of its fiscal year, which concludes in the current quarter ending Sept. 30, could fall short of its earlier forecast because of the economic slowdown.
Apple (AAPL: up $1.14 to $25.10, Research, Estimates) shares ended up $1.14 at $25.10 ahead of its earnings report. But they fell $2.20 to $22.90 in extended hours trade.
"We're delivering solid profitability while maintaining lean channel inventories in a weak economic environment," Chief Financial Officer Fred Anderson said. "Our balance sheet remains very strong, with over $4.2 billion in cash, and we are targeting a slight sequential increase in revenues and earnings per share in the September quarter."
The company previously forecast second-half sales of $3.2 billion to $3.4 billion, putting revenue for the year at $5.6 billion to $5.8 billion.
But in an interview with Reuters, Anderson would only forecast a "number north of around $3 billion plus" for the second half, citing tough economic conditions.
Bear Stearns analyst Andy Neff told Reuters prior to Apple's conference call that the company appeared to be guiding down for the fourth quarter. "(The) other key is what products Steve Jobs introduces at MacWorld on Wednesday," he said.
When Apple reported its fiscal second-quarter results in April, the company surprised the Street with a profit of 11 cents per share, where analysts generally had expected earnings of a penny per share. That was a strong recovery from the fiscal first quarter, when a series of missteps resulted in its first operating loss in three years.
Apple executives attributed the faster-than-expected recovery in large part to the launch of new products, including its new notebook computers, as well as strong demand for the OS X operating system.
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The company, which said earlier this month it planned to halt production of its compact G4 cube PC because of lackluster demand, said sales of its iBook notebook computer for the education and consumer markets, proved strongest, recording shipments of more than 182,000 units in the quarter.
Apple said gross margins declined in the second quarter compared with a year ago, and that 44 percent of its total revenue in the period came from international sales.
The company said it shipped 827,000 Macintosh computers in the period.
Apple opened its first two branded retail stores in the quarter. It plans to open 23 more by the end of 2001, Jobs said in a statement. 
-- from staff and wire reports
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