Apple Computer reported record earnings of $56.9 million for its first fiscal quarter, despite a 23.5% drop in sales.
Earnings for the quarter ended Dec. 27 were up 23.4%, compared to profit of $46.1 million in the year-ago period, exceeding even a 13% improvement predicted last month by Apple’s president and chief executive, John Sculley.
Revenue for the quarter was $533.9 million, down from $698.3 million in the comparable period a year ago and testimony to the poor Christmas sales experienced by many personal computer makers.
In its report, the Cupertino, Calif.-based computer maker attributed its record profit to improved margins and reduced inventories. It also said its pool of cash rose $246.1 million to $441.5 million.
Analysts said the earnings gain reflects Apple’s reduced overhead costs. Last summer, the company closed six factories and cut 1,200 jobs. As for the lower sales, Sculley said only that they were “as expected.”
“We accomplished our agenda for 1985,” Sculley’s statement said. “The reorganization is behind us. Now it is back to the future.”
In addition to paring back its production and work force last year, Apple restructured its management team, precipitating the bitter resignation in September of Apple co-founder and Chairman Steven P. Jobs.
As for the future, Apple is expected to unveil new products this week that it hopes will increase its acceptance in the business market now dominated by IBM. Apple is scheduled to show its enhanced Macintosh computer during its Apple World exposition and dealer conference that begins Thursday in San Francisco.