Sales Help Boost Apple Per-Share Profit 47%
Apple Computer Inc. on Wednesday reported profit that handily beat Wall Street expectations, crediting strong sales of its PowerBook laptop and high-end G4 Power Macintosh desktop computers.
Apple, which has seen its stock price soar in the last year, also declared a 2-for-1 stock split, the company’s first split in 13 years.
The Cupertino, Calif.-based company said profit from operations jumped 72% to $160 million from $93 million, with earnings per share up 47% to 88 cents from 60 cents. Wall Street analysts had expected a profit of 81 cents a share, according to First Call/Thomson Financial. Revenue rose 27% to $1.94 billion.
Chief Financial Officer Fred Anderson said Apple had a strong mix of higher-margin professional products, such as its G4 computers and a new line of PowerBook notebook computers. He also said the company had lower costs because it did not have to spend as much to ship products via air freight as it did last quarter, when its new iBooks and iMacs were in tight supply.
A decline in memory chip prices also helped send gross profit margins to 28.2%, up from 26.3% a year ago. Anderson also forecast that gross profit margins will probably rise again in the company’s third fiscal quarter.
Unit sales rose 26% to 1 million, Apple said, which included 100,000 units of the new PowerBooks and 153,000 units of the G4s. Anderson said that although the popular iMac and iBook notebook sales were not as strong as in the busy December quarter, sales were close to expectations.
Average selling prices in the quarter rose to $1,820, up from $1,673 in the first fiscal quarter, because of the better product mix.
Apple’s latest earnings exclude an after-tax gain of $73 million, or 40 cents a share, from the sale of 1.5 million shares of Arm Holdings. The year-earlier figures exclude a $50-million gain and an $8-million restructuring charge.
Apple stock, which fell $5.75 to $121.13 in Nasdaq trading ahead of the earnings announcement, is still up more than three times its 52-week low of $33.50.
At a Glance
Other earnings, excluding one-time gains or charges unless noted:
* Alltel Corp. said net income rose 19% to $221.9 million, or 70 cents a share, beating estimates of 67 cents, as its mobile phone customers increased more than 10%. Revenue increased 8.1% to $1.6 billion.
* Applied Micro Circuits Corp. said fiscal fourth-quarter profit climbed sixfold to $20.6 million, or 16 cents a share, from $3.4 million, or a split-adjusted 3 cents, a year ago. Analysts were expecting 14 cents a share. Revenue rose to $57 million from $28.7 million.
* Ask Jeeves Inc. said its first-quarter loss widened to $18.9 million, or 59 cents a share, from $5.6 million, or 31 cents, but the performance far exceeded the loss of 74 cents analysts expected. Revenue surged elevenfold to $17.8 million from $1.5 million. Sales and marketing costs surged to $19.5 million from $3.05 million. The latest results exclude acquisition-related charges of $26.7 million.
* CNet Networks Inc. said it earned $1.5 million, or 2 cents a share, in the first quarter, contrasted with analyst expectations of a loss of 6 cents a share. Revenue more than doubled to $45.4 million from $20.1 million, exceeding forecasts of $40.2 million. The company’s latest results exclude goodwill amortization and other items.
* Commerce One Inc. said its first-quarter loss widened to $14 million, or 18 cents a share, from $12.3 million, or 28 cents, a year ago as expenses quadrupled. Analysts expected a larger loss of 24 cents. Revenue skyrocketed to $35 million from $2.1 million.
* Conexant Systems Inc. reported pro forma net income of $47.1 million, or 21 cents a share, for its fiscal second quarter, 3 cents better than forecasts, up from net income of $7.62 million, or a split-adjusted 4 cents, a year ago. Sales rose 58% to $501.7 million as Conexant benefited from rising demand for its chips for cell phones, Internet access gear and satellite TV set-top boxes.
* EarthLink Inc. said it lost $50.9 million, or 43 cents a share, a much better performance than the 49-cent loss analysts expected, as it boosted spending for marketing and revenue rose 69% to $219.7 million. The second-largest U.S. Internet service provider had earned $3.2 million, or 3 cents, a year earlier. The company gained 340,000 subscribers in the quarter ended March 31. It now has about 3.46 million customers. The latest results exclude charges for restructuring and the acquisition of MindSpring Enterprises Inc.
* Egghead.com Inc. beat analyst expectations with a first-quarter loss of $22.6 million, or 60 cents a share, compared with a loss of $18.3 million, or 54 cents a share, a year ago. Analysts had anticipated a loss of 65 cents. Revenue rose to $147.8 million from $110.1 million.
* Extreme Networks Inc. said fiscal third-quarter earnings surged twentyfold to $9.1 million, or 16 cents a share, from $433,000, or 1 cent, as revenue more than doubled to $67.3 million from $29.1 million. Analysts expected 12 cents, and “whisper” estimates were as high as 16 cents.
* Informix Corp. said first-quarter earnings more than tripled to $270 million, or 9 cents a share, a penny better than expectations, on a 10% gain in revenue to $250.9 million.
* Lucent Technologies Inc. said lower operating expenses and booming sales of optical fiber and network services and equipment boosted profit 41% in its fiscal second quarter to $754 million, or 23 cents a share, a penny better than forecasts. Total revenue, which includes units earmarked for spinoff and phone-making operations that Lucent sold, rose 17% to $10.3 billion, exceeding analyst estimates of $9.2 billion to $9.8 billion.
Lucent also said it will outsource all but its most high-tech equipment manufacturing to boost cash flow and meet customers’ needs more quickly. To do so, Lucent will sell some of its 17 U.S. manufacturing plants to contract manufacturing partners, leaving about 11,000 workers either with a new employer or jobless.
* Qwest Communications International Inc. said first-quarter earnings surged more than sixfold to $30 million, or 4 cents a share, a penny better than forecasts. Revenue rose 39% to $1.22 billion. Qwest’s Internet and data business increased threefold in the quarter to $365 million, accounting for 30% of revenue.
* Spyglass Inc. said it earned 3 cents a share in its fiscal second quarter, contrasted with analyst expectations it would lose 1 cent a share. Including a one-time gain from an investment, Spyglass earned $14.6 million, or 74 cents a share. It had profit of $109,000, or 1 cent, a year ago. Revenue rose 22% to $9.08 million.
* Symantec Corp. said fiscal fourth-quarter net income rose 43% to $31.6 million, or 49 cents a share, including amortization of goodwill and one-time acquisition-related items. Excluding those items, profit was 63 cents a share, better than the 59 cents analysts expected. Sales rose 22% to $187.2 million.
Bloomberg News and Reuters were used in compiling this report.
