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| Architosh News Reports | |
| Architosh Staff (info@architosh.com) |
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Apple Reports Second Quarter Profit of $135 Million
Apple Computer, Inc. announced its second quarter financial results for fiscal year 1999 today. As expected (and better than the street's call) Apple posted its sixth consecutive profitable quarter, ending the period with a profit of $135 million, or $.84 per diluted share. This compares with a year ago profit of $.38 per diluted share. Revenues for the quarter were $1.53 billion, up 9 percent from the year-ago quarter, and gross margins were 26.3 percent, up from 24.8 percent in the prior year quarter. International sales accounted for 50 percent of the quarter's revenue. This quarter's results included a net favorable gain of $42 million from Apple's sale of 2 million shares of British ARM Holdings plc., the RISC chip designer that Apple and Acorn computers initially funded and jointly founded. In addition, the company absorbed a one time restructuring charge of $8 million associated with improving its manufacturing operations. Without these non-recurring items, Apple's net profit was $.60 per diluted share or $93 million. Unit growth was also better than the industry's average. Strong demand for iMacs and the new blue and white Power Macintosh G3's drove unit growth to 27 percent year-over-year. That is a favorable figure compared to IDC's worldwide forecast for industry growth at 14 percent. Although these numbers are very strong and beat the industry average, sustained sequential revenue growth for the quarter did not happen, as last quarter's revenue was approximately $1.7 billion. How Wall Street will react to this we'll see tomorrow morning. Analyst have mentioned that to believe Apple is really "back" is to see them not only be profitable sequentially but to increase revenue sequentially as well. Regardless, a strong profitable quarter in one traditionally weak for Apple is a good sign. Next quarter's results should be favorable as Apple will release not only new PowerBooks and speed bumped G3's but quite possibly the rumored P1 portable iMac as well.
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