The following message is suppose to pass to you, Rocky. I copy for you.
To: borb (52625 )
From: jackson
Thursday, Apr 16 1998 7:13AM ET
Reply # of 52640
Rocky,
Isn't the G3 one of the systems that incorporates a Zip 100?????
interactive.wsj.com.
Apple Beats Analysts' Estimates
For the Second Straight Quarter
By JIM CARLTON
Staff Reporter of THE WALL STREET JOURNAL
Apple Computer Inc. far exceeded analysts' profit expectations for the second straight
quarter and reported its first increase in Macintosh unit shipments in two years.
The computer maker reported net income for the fiscal second quarter ended March 27
of $55 million, or 38 cents a diluted share, compared with a loss of $708 million, or
$5.64 a share, in the same period a year earlier. Analysts had estimated Apple would
earn just 17 cents in the quarter, according to First Call. The profit figures show
continued improvement in cost controls at the Cupertino, Calif., computer maker, which
had lost nearly $2 billion in the prior two years.
Apple also said unit sales rose 8% in the quarter, the first clear sign that the company's
long market-share slide is slowing. As of December, the most recent period for which
figures are available, Apple's share of the global personal-computer market had fallen to
2.6% from 4.6% in the same period a year before, according to Gartner Group's
Dataquest unit.
****** For the latest period, however, Apple posted strong sales of a new line of
Macintosh systems based on a powerful microprocessor called the G3. Analysts say
there was heavy pent-up demand by existing Macintosh users for the speedy system.
******
"The company has proven they know how to clean up the house internally and make
good products," said Lou Mazzucchelli, analyst at Gerard Klauer Mattison & Co. in
New York. In a statement, interim Chief Executive Officer Steve Jobs said: "Apple had
a great quarter, no question about it."
The results were issued after stock markets closed Wednesday. Apple's shares closed
at $27.4375, up 50 cents, in Nasdaq Stock Market trading. In after-hours trading, the
company's shares rose to $29.75, according to Instinet Inc.
Apple said it shipped 650,000 units in the quarter, 51% of which were new G3 systems
that carry higher profit margins than older machines. But the company's increased unit
sales haven't yet translated into revenue growth, because Macintosh prices are well
below levels of a year earlier.
Total revenue during the quarter fell 13% to $1.4 billion from $1.6 billion a year earlier.
Although the decline appears to be slowing, analysts still express concern that Apple has
essentially shrunk from an $11 billion-a-year company in 1995 to a $6 billion-a-year
company at the current rate of sales. "This quarter doesn't answer completely yet
whether they can regain growth," Mr. Mazzucchelli said.
Apple is set to introduce a number of new products later this year, including new
laptops and low-end models, that could help sales growth. But the company is late in
delivering a system in the hot market for sub-$1,000 computers, analysts said, hurting its
sales in consumer markets and education.
"It is a significant negative for them to wait so long to tackle the sub-$1,000 market,
because this has opened up the education market for competitors to come in," said Eric
Lewis, analyst for International Data Corp., a market-research firm in Framingham,
Mass.
Fred Anderson, Apple's chief financial officer, had previously predicted a return to
year-over-year revenue growth in its fiscal fourth period ending in September. In a
conference call Wednesday, Mr. Anderson said he now doesn't expect "meaningful"
growth until the fiscal first quarter ending in December, when the impact of the new
products will be felt. He said revenue in the current quarter, Apple's fiscal third period,
is expected to be roughly flat with the second quarter. Revenue in the fourth period
should increase sequentially over the third, he said.
Apple has taken a series of steps to reduce costs and improve profitability under Mr.
Jobs, who returned last year to lead the company he co-founded. Its gross margins, or
gross profit as a percentage of sales, swelled in the second period to 25% from 22% in
the first quarter and 19% in the year-earlier period, and Mr. Anderson said margins
should remain above 23%. He attributed the improved margins to higher profits on the
G3 as well as tighter controls in areas such as research and development.
In recent interviews, Apple officials have expressed confidence that Mr. Jobs's
strategies are paying off. Among other moves, Mr. Jobs has killed off Apple's Newton
development and a program to license Macintosh software to other computer makers.
"It's starting to work, [but] we recognize that we still have a long road to go down," said
Jon Rubenstein, Apple's senior vice president of hardware engineering. The company
also reiterated that the search for a permanent CEO is "on the back burner." |
