News > Technology
Apple gets bitten
Computer maker cuts current-quarter sales, profit targets, joining AMD.
June 19, 2002: 12:08 PM EDT

NEW YORK (CNN/Money) - Apple Computer Inc. warned Tuesday that sales and profit in the quarter ending this month will fall short of forecasts as the slowdown in new computer spending proves persistent.

Shares of Apple tumbled $2.12 to $18.03 after hours, widening their year-to-date loss to 17.7 percent.

graphic graphic
Sales in Apple's fiscal third quarter will range from $1.4 billion to $1.45 billion, the company said, down from the $1.6 billion estimated in April. And Apple now predicts profits ranging from 8 cents to 10 cents a share. That's down from 11 cents previously estimated and 13 cents expected by analysts surveyed by First Call.

"The consumer market is pretty soft," Fred Anderson, Apple's CEO, told investors in a conference call. "We are seeing things similar to what our competitors are."

Anderson said the pick up in sales that traditionally happens around Father's Day and graduation time did not happen. Apple blamed some of the disappointment on weakness in Europe and Japan along with slowing business from advertisers and publishers.

Moments before Apple warned, Advanced Micro Devices Inc (AMD: Research, Estimates)., which makes computer chips, cut its second-quarter sales forecast and said it faces a substantial operating loss.

Looking ahead, Steve Jobs, Apple's CFO said he remains upbeat about Apple's prospects for long-term growth. But the Cupertino, Calif.-based company offered no guidance Tuesday about the next quarter.

"I prefer to wait until we complete the quarter," Anderson said.

Like many computer makers, Apple's profits peaked in 2000. It's been tough ever since as consumers and business cut technology spending. The Nasdaq composite index, home to many tech stocks, has not had a winning year since 1999.

Still, Apple has returned to profitability after losing money in the December quarter of last year.

In April, Apple unveiled its first personal computer designed exclusively for schools, the eMac, a move some say is intended to defend its position in the education market.

Analysts peppered Anderson with questions about Apple's retail stores, a strategy employed by rival Gateway (GTW: Research, Estimates). But Apple remained mum on those questions.  Top of page