April 17, 2002 4:25 PM PDT

New iMacs lift Apple's quarter

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update Buoyed by strong demand for the new flat-panel iMac, Apple Computer's second-quarter earnings were in line with what the company had forecast in January.

The Mac maker said it earned $40 million, or 11 cents per share, on revenue of $1.5 billion in its quarter ended March 30. That compares with a net profit of $43 million, or 12 cents per share, in the year-ago quarter. Revenue was up 4 percent from $1.43 billion in the same quarter a year ago.

Analysts had been expecting a profit of 10 cents a share, according to the consensus estimate from First Call. In January, Apple predicted it would earn 11 cents a share on revenue of "about $1.5 billion."

"We've experienced incredible demand for the new flat-screen iMac and shipped 220,000 this quarter," Apple CEO Steve Jobs said in a statement. "Feedback from customers using them has been off the charts. We've clearly got a winner here."

Apple said it shipped 813,000 Macintoshes during the quarter, up 8 percent from the year-ago quarter.

Jobs also said the company plans to open an additional 20 Apple retail stores by the end of this calendar year.

The company predicted that sales and earnings would be slightly better in the current quarter.

"We are targeting June-quarter revenues to be up sequentially to about $1.6 billion and (earnings per share) to be flat to up slightly compared with the March quarter," Chief Financial Officer Fred Anderson said in a statement.

Apple has seen strong demand for its flat-panel iMac but has struggled to meet that demand. It also raised prices by $100 on the machines to account for rising component prices.

Apple said it shipped 372,000 iMacs, including about 150,000 of the original design, generating $448 million in revenue. That represents a 24 percent increase in units and 57 percent increase in revenue.

Shipments of the iBook laptop also increased, with shipments and revenue up more than 150 percent from those of a year ago. Apple shipped 141,000 iBooks in the just-ended quarter.

However, Apple's professional line, comprised of the Power Mac desktop and PowerBook laptop, both declined in sales and units compared to a year ago. Apple shipped 89,000 PowerBooks and 211,000 Power Macs, a decline of 34 percent and 19 percent, respectively.

David Bailey, an analyst at Gerard Klauer Mattison, a Wall Street brokerage firm, said that Apple had a solid quarter despite some initial difficulties ramping up production of the new iMac. Bailey said that Apple managed to see sales rise in the March quarter, compared with the December quarter, despite the fact that the March quarter is typically a slower one in the computer industry.

"In what is typically a weaker quarter, the combination of the new iMac and Apple's loyal (user) base allowed them to buck that trend," Bailey said.

Bailey said that Apple's sales forecast was "pretty bullish," which he saw as a sign of continued strong demand for the new iMac. However, he said that the company's earnings outlook was somewhat below expectations.

"It appears the company is being conservative with their outlook on component prices," Bailey said.

 

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