Apple Posts Another Profitable Quarter

 
 
By Daniel Drew Turner  |  Posted 2004-04-14 Email Print this article Print
 
 
 
 
 
 
 

Apple on Wednesday reported upbeat second-quarter results and pointed to strong growth in the period from its diverse product mix. Earlier the company updated its low-cost education line of all-in-one desktops.

Apple Computer Inc. on Wednesday reported upbeat second-quarter results and pointed to strong growth in the period from its diverse product mix. In a conference call with financial analysts today, Senior Vice President of Finance Peter Oppenheimer said the company had the "strongest second quarter in years," noting that Apple has so far seen a 33 percent revenue growth for the first half of fiscal year 2004. He attributed the performance largely to a "more diverse" product line and "expanded distribution" from Apples own stores and Internet-based sales. Apple showed a net profit of $46 million, including an after-tax restructuring charge of $7 million. Without that charge, quarterly profits would have risen to $53 million.
Revenue for the quarter was $1.9 billion, which was an increase of 29 percent compared to the second quarter in 2003; however, the figure was 5 percent lower than the first fiscal quarter. Margins—long a strength for Apple even as other PC manufacturers saw theirs drop precipitously—dropped slightly from 28.3 percent to 27.8 percent.
In a statement prepared for Apples 8-K filing with the Securities and Exchange Commission, Chief Financial Operator Fred Anderson noted that the numbers represented a "third straight quarter of double-digit revenue growth" and "200 percent earnings per share growth year-over-year." The company expects next quarters revenues will hit $1.925 billion. Oppenheimer said in todays call that the Power Mac line saw a drag on sales from reduced channel inventory as well as from the delay in releasing the PowerPC G5-based Xserve server. Notebooks accounted for about 48 percent of CPU sales in the quarter. On the retail front, Oppenheimer said that the Apple stores brought in approximately $266 million, twice the sales of last year. He added that over 5.7 million people visited all stores and the stores averaged $3.5 million in the quarter. Apple plans to open 10 more stores in 2004, he said, including one in London before the end of the year.
Though K-12 sales were flat, which Oppenheimer attributed to constrained budgets in local school systems, higher education sales were "good," he said. Breaking down the product sales numbers only Apples entry-level iBook notebook line showed any sequential growth over the first financial quarter. For example, Power Macintosh desktop and server sales dropped 16 percent in units and 12 percent in revenue; entry-level desktop iMacs and eMacs dropped 4 percent in sales and were flat in revenue; iBook sales were flat but turned in a 1 percent revenue gain; and PowerBook sales dropped 19 in sales and 16 in revenue. However, both iBook and PowerMac sales were strong year-over-year, rising 51 percent and 12 percent in units sold, and 48 percent and 19 percent in revenue, respectively. Some industry observers pointed to iPod sales as driving Apples growth—quarterly unit sales growth was 10 percent, generating a 3 percent increase in revenues from the first quarter, for an $8 million difference, from $256 million to $264 million. Looking at last years figures, however, the success of the iPod is evident. The numbers provided today show a 909 percent increase in units sold when compared to the year-ago quarter, giving Apple a 752 percent revenue boost from $31 million to $256 million. Anderson said in February that he will retire on June 1 and Oppenheimer will take the financial helm of the company. Meanwhile, a day before its quarterly earning report, Apple announced a revamp to its eMac line of consumer all-in-one computers. In addition to a speed bump to a 1.25GHz PowerPC G4 processor, the two new models of the new eMac gain an ATI Radeon 9200 video card, USB 2.0 ports and higher-capacity hard drives. The $799 model now comes with a 32x Combo (DVD-ROM/CD-RW) optical drive and a 40GB hard drive, while the $999 model sports an 8x SuperDrive (DVD-Recordable/CD-RW) and an 80GB drive. Both still include a 17-inch CRT monitor. Check out eWEEK.coms Macintosh Center at http://macintosh.eweek.com for the latest in news, reviews and analysis about Apple in the enterprise. Be sure to add our eWEEK.com Macintosh news feed to your RSS newsreader or My Yahoo page:  
 
 
 
 
 
 
 
 
 
 
 

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