Apple Profits, Revenues Rise

 
 
By Daniel Drew Turner  |  Posted 2003-10-15 Email Print this article Print
 
 
 
 
 
 
 

UPDATED: Apple on Wednesday said its Q4 profits and revenue climbed on sales of new desktops and consumer devices. The Apple retail stores also made their first profit.

Apple Computer Inc. on Wednesday reported its fourth-quarter financials, revealing a net profit of $44 million and revenues of $1.72 billion. This exceeded Apples guidance and represents a dramatic change from the year-ago quarter, when the company posted a net loss of $45 million and revenues of $1.39 billion. Without an after-tax gain of $6 million and $9 million related to stock repurchases, net income would have been $29 million. However, the company said that its net loss of a year ago was largely due to non-recurring items: a restructuring charge of $4 million, an R&D charge of $1 million and a write-down of equity investments costing $49 million (a change in compensation that was worth $2 million toward the black). Without these charges, Apple actually profited $7 million for that quarter of 2002. Chief Financial Officer Fred Anderson said in an analyst briefing that Power Mac desktop sales were 221,00 units, up from "about" 126,000 prior to the introduction of the Power Mac G5. Anderson declined to give a breakdown by SKU "for competitive reasons," but did say that there was "strength at the high end" and that demand for the entry-level Power Mac G4 remained strong.
PowerBook sales were also strong, coming in at 176,000 units. Anderson said that the new 15-inch PowerBook was "well received" and that a softness in iBook sales could be partially the result of "cannibalization" from sales of the 12-inch PowerBook.
Most pronounced was a 140 percent increase in the sales of the iPod personal music player, reaching 336,000 units for the quarter. Originally introduced as a Mac-only product, Apple released a Windows version of the iPod in July 2002. Turning to the Apple retail stores, Anderson announced their first profitable quarter, with quarterly revenue per store reaching $3.1 million, up from $2.6 million last quarter. He said Apple expects to have running 73 stores by Thanksgiving and will open the first international site in Tokyo by the years end. Though total educational channel sales were down 15 percent, Anderson noted that this was perhaps due to the reluctance of school districts to spend on new equipment in their first fiscal quarter. However, Anderson said, though the K-12 area was "weak," Apple had its "strongest quarter in years" in the higher education arena, partially due to the popularity of the PowerBook line.
These results leave Apple with an increase of cash-on-hand of $25 million, to $4.66 billion total. Anderson said that Apple expects to see revenue increase in the next quarter, up to perhaps $1.9 billion. This will accompany an expected increase in margin to 27 percent, thanks in part to operating system sales after the release of Panther, the next revision of the Mac OS X, slated for an October 24th ship date. Editors note: This story has been updated since its original posting to include information from Apples conference call with analysts. Discuss this in the eWEEK forum.
 
 
 
 
 
 
 
 
 
 
 

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