Apple Computer Inc is the latest to embarrass those on Wall Street who were telling us that Apple would turn in a massive loss for its fourth quarter. The Cupertino company reported a $25m net earnings, after writing back $17m of over-enthusiastic charges taken earlier (CI No 3,022). And chief executive Gilbert Amelio says the […]
Apple Computer Inc is the latest to embarrass those on Wall Street who were telling us that Apple would turn in a massive loss for its fourth quarter. The Cupertino company reported a $25m net earnings, after writing back $17m of over-enthusiastic charges taken earlier (CI No 3,022). And chief executive Gilbert Amelio says the company is confident it can achieve sustained profitability by the end of its fiscal 1997 second quarter, although whether it will be red or black ink this quarter is too close to call. But the company entered it on a very healthy balance sheet after all those worries that it was going to run out of cash: its cash and short-term investments totaled more than $1.7bn in the fourth quarter, up from $952m in the year-a go quarter. Unit shipments for the quarter fell about 26% for the year-ago fourth quarter to about 932,000, but were up 11% from the third quarter. And its gross margins rose to 22% from 18.5% the year before. We continue to make progress in streng thening Apple’s financial condition, as our $410m in positive cash flow from operations during the quarter suggests, executive vice president and chief financial officer Fred Anderson commented.This quarter, Anderson expects revenues to be relatively flat from its September quarter and gross margins to continue at or above 20% – but higher levels of consumer advertising in the current quarter, which is typically the year’s heaviest selling season, can push operating expenses a bit higher. The profit of $0.20 a share compared with a consensus forecast loss of 30 cents from Wall Street. Apple’s target for layoffs has been reduced to 1,500 from its previous goal of 2,800, with 900 employees having been laid off since January. The shares rose $2.50 to $28.125 after hours on Wednesday. Apple also tidied up what its executive vice-president told the San Jose Mercury News, and said there would be a total renewal of the PowerBook family, with a new PowerBook on October 21, and a number of additional new PowerBook models expected to appear throughout 1997; the intention to pursue the home market with products at a range of price points; plans to introduce a Performa to meet the specific demands of the home and education market; and plans to offer specially designed software packages for elementary, middle school and high school students, as well as a games package.