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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: rudedog who wrote (58062)	4/15/1999 2:17:00 PM
From: rupert1	Respond to of 97611

Compare and Contrast - APPLE-COMPAQ April 15, 1999 -------------------------------------------------------------------------------- Apple Fincl Chief Sees Units, Sales Up In 3Q From 2Q Dow Jones Newswires This story was originally published Wednesday. By Christopher Grimes NEW YORK (Dow Jones)--Apple Computer Inc. (AAPL) beat Wall Street's earnings expectations for the second quarter and issued an optimistic outlook for the current period. Apple said Wednesday its operating earnings were 60 cents a share on $1.53 billion in sales, compared with 38 cents a share on $1.4 billion in sales a year ago. The earnings beat Wall Street's estimate by 3 cents a share. The Cupertino, Calif., computer maker's shares rose 1 1/8, or 3.2%, to 35 3/4 ahead of the report, which was released after the close of New York trading. But the stock fell to 33 7/8 in after-hours trading, according to Instinet. In a conference call, Apple Chief Financial Officer Fred Anderson said the third quarter marks the beginning of the education buying season, so the company is looking for a sequential increase from the 827,000 units shipped in the second quarter. The education market is still a stronghold for Apple. Apple also introduced a 333-megahertz version of its multi-colored iMac machines, which will be supplied to resellers through a new program. Apple will sell them in lots of eight instead of five, with stores receiving four blue iMacs and one of each of the other four colors. The company tried to quell analysts' concerns that the multi-colored machines were causing inventory headaches for stores. Anderson said iMac inventory in the sales channel had fallen to below three weeks' worth from five weeks' worth in the first quarter. "This means iMac sell-through volume was significantly greater than" the number of machines being pumped into the sales channel, Anderson said. The company pointed to market research indicating that its share of the U.S. retail market and the mail-order market had reached as high as 12.5%. And it claims that 32% of its sales in the second quarter were to new computer buyers - a data point, that, if true, means the base of Apple users is increasing after years of decline. Apple's share of the U.S. retail PC market was 6.4% in February, compared with 1.6% a year earlier, according to Ziff Davis market research. "It was a very solid quarter all around," said Andrew Neff, an analyst at Bear Stearns & Co. Because Apple doesn't sell a lot of computers to large corporate accounts, the company didn't see much of the apparent commercial sales weakness reported last week by Compaq Computer Corp. (CPQ), Apple's Anderson said. "I think unlike most of the other PC industry companies, Apple's success is not strongly tied to the commercial market," Anderson said. "Over the last six to nine months we have clearly taken share in terms of retail desktop markets." Analysts expect Apple to introduce a new, inexpensive laptop aimed at consumers, possibly as soon as the current quarter. In an interview and in the conference call, finance chief Anderson wouldn't comment on the timing of the product. "That's going to be the next big squirt of (revenue)" said Roger Kay, an analyst at International Data Corp. Anderson said the current portable, the Powerbook, gave a "weaker performance" in the second quarter, speculating that customers put off purchases because they are waiting on future products. - Christopher Grimes; 201-938-5253