April 16, 1997 7:00 PM PDT
Apple loses $708 million
The loss amounted to $5.64 a share for the period ending March 28. In the same quarter last year, Apple posted a record quarterly net loss of $740 million, or $5.99 a share.
Analysts said the loss resulted when Apple took a larger charge than expected for the acquisition of Next Software and sales that were slightly under the expectations of Wall Street.
The computer maker generated revenues of $1.6 billion in the quarter, down from $2.19 billion a year ago.
"We announced results that are disappointing," chief executive Gilbert Amelio said in a conference call to analysts and the media. "We feel the worst is behind us, and our strategy is on track."
The $708 million was by far the largest quarterly net loss since Amelio was firmly established at Apple's helm. Amelio had just come on board when Apple reported its record loss a year ago.
The loss from operations, which excludes the cost of the Next acquisition and other one-time charges, reached $186 million, or $1.48 a share. Wall Street had expected an operating loss of $151.9 million, or $1.22 a share, according to First Call, a collection of earnings estimates by analysts.
|Apple's operating performance|
|Quarter||Operating* profit (loss)|
|Q2 97||($186 million)|
|Q1 97||($124 million)|
|Q4 96||$34 million|
|Q3 96||($116 million)|
|Q2 96||($360 million)|
|*Excludes one-time charges.|
"They have yet to demonstrate a strategy to return to profitability on a permanent basis," said Stephen Dube, an analyst with Wasserstein Perella Securities in New York. "We also want to hear a better definition of what their market is."
Amelio said that while the company has encountered a "stormy" 12 months, Apple has laid the ground to move forward in achieving profitability by the end of the fourth quarter.
The computer maker said it has $420 million in back orders for its products, adding that wholly owned software subsidiary Claris reached record revenues of $70 million and during the quarter, Apple chief financial officer Fred Anderson said. The company was also able to maintain its liquidity level during the quarter at $1.4 billion.
Analyst Daniel Kunstler, with J.P. Morgan Securities in San Francisco, said Apple's challenges are no different from those it faced yesterday. "They need exciting hardware, to maintain liquidity, and to build an operating system and execute on it," he said.
But one issue in particular troubles Kunstler: the year-to-year decline in quarterly unit shipments. The company shipped 670,000 units in the quarter, compared with 892,000 a year ago, he noted.
"That is one that sticks in my throat," Kunstler said.