Apple beats the Street with financial picture

Apple's net profit of US$43 million, or $.12 per diluted share, for its fiscal 2001 second quarter ended March 31 compare to a net profit of $233 million, or $.64 per diluted share, achieved in the corresponding financial quarter in 2000. But these numbers are much better than last quarter, when the company posted a net loss of $195 million, or .58 cents a share -- its first loss in three years.

And, as is often the case, our favorite computer maker beat Wall Street's predictions. In fact, Apple did a full dime better than the 1 cent per share profit analysts polled by earnings tracker First Call had expected.

Revenues for the quarter were $1.43 billion, down 26 percent from the year ago quarter, but up from last quarter. Gross margins were 26.9 percent, compared to 28.2 percent in the fiscal 2000 second quarter, but much better than last time's negative 2.1 percent. Apple shipped 751,000 Macs during the quarter, compared to 1,377,000 systems a year ago and 659,000 Mac units last time around.

Apple CEO Steve Jobs attributed Apple's return to profitability in the "tough economic climate" to such "innovative new products" as the Titanium PowerBook G4, Mac OS X, iTunes, iDVD and the SuperDrive.

Fred Anderson, Apple's Chief Financial Officer, said Apple delivered "solid profitability" while reaching their goal of four weeks of channel inventory ahead of schedule (down from 5.5 weeks last quarter). The company's balance sheet remains strong, with over $4.1 billion in cash.

"Customer reaction and reviews for the new products have been excellent," Anderson said.

For instance, Apple has sold over 115,000 of the new PowerBooks. They're churning new ones out as fast as possible and expect to get back orders down to normal levels before the end of the month.

Anderson didn't offer figures on the Power Mac 733/SuperDrive system, but said it had been "well received by our pro customers." Sales on the systems should increase now that the supply isn't so constrained. The SuperDrive is a combination CD-RW/DVD-R drive that can read and write ("burn") DVDs that can be played in consumer DVD players. The Apple SuperDrive comes standard only in the high-end Power Mac G4 model.

International sales accounted for 48 percent of the quarter's revenues. On a sequential basis, Anderson said that the United States and Japan were the strongest performers. Europe also did well, though "we're seeing some softening there," Anderson said. Other regions are down in the year-over-year outlook.

Apple stock was up 12.5 percent prior to its earnings report. Shares rose $2.39 to $22.79 on Nasdaq ahead of the earnings results, which were released after the closing bell. They climbed more than 20 percent to $27 in after-hours trade following the results.

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