In Brief : Apple Earnings Climb, Shares Fall
Apple Computer Inc. said today that earnings for its first fiscal quarter ended Dec. 30 rose 16% as sales jumped a strong 35%.
Apple’s shares declined, however, amid concerns that its higher-priced computers, key to the company’s development as a corporate and office computer maker, were not selling well. The fears were triggered when Apple announced price cuts ranging from 9% to 25% for its higher-priced machines.
In active early over-the-counter trading, Apple’s shares fell $2 to $41.75.
In the first quarter, Apple’s revenue jumped to $1.41 billion from $1.04 billion, an increase of 35%. Sales of the Macintosh were up 30%. Profits rose more slowly, however, up by 16% to $140.5 million, or $1.10 a share, from $121.4 million, or 92 cents a share.
Apple said profits were restrained by rising costs for components, including one-megabyte memory chips. Also hurting the profit per dollar of revenue was a shift in its sales mix toward less expensive Macintosh models. The company said its price cuts on higher-priced models were a response to this trend.