Apple Computer Loses $56 Million in Quarter
Apple Computer Inc.’s relentless decline gathered more force Wednesday when the personal computer maker said it lost $56 million in the three months ended June 27 and expects to lose more money during the current quarter.
The latest loss was less than feared by Wall Street, which had forecast that the Cupertino-based concern might lose as much as $100 million for its fiscal third quarter.
Nonetheless, the deficit follows $1.6 billion in losses Apple suffered in the prior 18 months, and it came only a week after the beleaguered company ousted Chief Executive Gilbert Amelio and began looking for a replacement. As a result, industry watchers continue to suggest that Apple’s outlook remains bleak.
“There is nothing I foresee that shows Apple has the ability, the resources or the wherewithal to change their current direction, which is anything but up,” said Matt Sargent, an analyst at the research firm Computer Intelligence in La Jolla.
William Milton, an analyst at the investment firm Brown Bros. Harriman in New York, said that despite the smaller-than-expected loss, “the issue here is who’s the new CEO going to be, and what is he going to do?”
Apple’s third-quarter loss compares with a loss of $32 million in the year-earlier quarter and comes on a 20% plunge in Apple’s sales, to $1.74 billion from $2.18 billion a year ago.
But Apple noted that its $60-million pretax loss from operations in the latest quarter was sharply lower than the $186-million operating deficit it recorded for the quarter ended March 31 (excluding one-time charges), in good part because it’s shaving its costs of doing business.
“Our financial goals are to continue to reduce operating expenses and to return the company to profitability,” Fred D. Anderson, Apple’s chief financial officer, said in a statement.
The results were announced after the stock market closed. Earlier, Apple’s stock rode the coattails of a broad surge in technology shares and edged up 50 cents a share to close at $16.44 on Nasdaq.
Apple’s latest loss came a week after the company unseated Amelio, the third Apple leader forced out in the last four years. Amelio was hired 17 months ago to fix Apple’s problems, but the company’s plight only worsened.
Apple has been in a downward spiral for several years, a decline so steep that computer experts now question whether Apple--once the darling of the personal computer business--can survive as an independent entity or will ultimately be sold.
With its storybook start--it was formed in 1976 by Steve Jobs and Steve Wozniak in a garage--and its astonishing early success, Apple once had an almost religious following, especially for its flagship Macintosh computer that debuted in 1984.
Software developers wrote innovative programs for spreadsheets, education and graphics that thrilled users and helped inspire the myriad of personal-computing uses employed today.
But several years ago, Apple began suffering a slide in sales, profit and market share that stemmed from a number of management missteps. They included the company’s long delay in licensing the Macintosh’s technology to third-party, or “clone,” computer manufacturers that would have expanded retail sales of Macintosh-type machines.
And as Apple’s market share slipped, software writers stopped developing and improving programs to run on the Mac, further limiting its appeal to a wider audience.
Publicity about the company’s woes has only exacerbated its problems: In the last 18 months, Apple’s share of the worldwide PC market has been shaved by half yet again, to 3% from 6%.
All of which has sent Apple’s stock price into a tailspin. Two years ago, the stock traded for nearly $50 a share; since then, nearly 70% of the company’s market value--roughly $4 billion--has been wiped out.
