took its lumps in the fiscal first-quarter with a net loss of US$195 million, or 58 cents a share, before a new accounting procedure, but is optimistic it will return to “slight” profitability in the current fiscal second-quarter, the company announced Wednesday. The good is the company said it had squashed its bloated inventory from 11 weeks in late September to 5.5 weeks at year’s end.
Apple said its net loss for the period — its first in three years — was $247 million, or 73 cents a share, excluding investment gains and losses, with the use of a new accounting standard.
Analysts surveyed by First Call/Thomson Financial expected the computer maker to report a loss of 65 cents a share, before the accounting procedure change. As an important factor in analyzing earnings results, analysts do not estimate profit or loss per share based on changes in accounting practices during the reported quarter. Such changes will be reflected in estimates for the fiscal second quarter.
In the same period last year, Apple reported a profit of $183 million, or 51 cents.
Revenue in the quarter was “slightly above a billion,” Chief Financial Officer
told analysts during a late-afternoon conference call, dropping 57 percent from the year-ago quarter of $2.3 billion. The revenue number was in line with Apple’s adjusted projections made in early December. Anderson said actual sell-through for the quarter was “in the $1.6 billion range.”
Anderson said Apple expects to return to profitability in the current quarter ending in March with what he called a “slight profit,” although he said he expects the March quarter to be the company’s weakest period.
“For the full fiscal year, we expect revenues to be about $6 billion,” Anderson commented. “With … new products and others in the pipeline, we believe we’re well positioned for a return to sustained profitability.”
Anderson appeared to be most surprised with the company’s ability to increase its cash reserves in spite of a quarterly loss. “That’s a lot of hard work and we’re conserving cash right now for opportunities for small acquisitions and driving our strategic initiatives,” he said.
Of significant news looking forward, Anderson reported the company had cleared out a substantial amount of its inventory, reducing stock by some 300,000 units, exceeding its target by 50,000. As a result, stock was down to 5.5 weeks, near its normal of four weeks.
He said Apple shipped 659,000 Macintosh units during the first quarter. Lowest channel inventories at the end of December were on the G4 towers and PowerBook products. Cube inventory came down, but is still the highest among all products. “By the end of this March quarter, we’ll have (Cube inventories) to a normal level where we would like it,” Anderson said.
Other important results Anderson mentioned included:
Gross margins for the first quarter were negative 2.1 percent, versus 25.9 percent last year.
The company cut the number of employees by 758 to 10,970, which primarily included part time holiday help.
International sales made up 49 percent of the quarter’s revenue.
Apple had an after-tax gain of $49 million from the sale of 1 million Akamai Technologies Inc. shares and 3.8 million of ARM Holdings PLC.
Apple ended the quarter with $4 billion in cash and short-term investments.
European sales were the best of all regions, although Anderson didn’t give details.
33 percent of all sales for the quarter were through the online Apple Store.
Apple chief executive officer and co-founder
was not part of Wednesday’s conference call, as he has been in the past.
closed at $16.81 Wednesday, down 31 cents, or 1.82 percent, on volume of 13.1 million shares.