The Latest

[NaegeleWDC at aol.com]

April 16, 2003 5:17 p.m. EDT 

Apple Reports Lower Profit,
Denies It Made Music Offer

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP

Apple Computer Inc. reported lower fiscal second-quarter net income as revenue was hurt by weaker shipments of its Macintosh computers.

The Cupertino, Calif., company reported net income of $14 million, or four cents a share, for the period ended March 29, down 65% from $40 million, or 11 cents a share, a year earlier.

Revenue slipped 1.3% to $1.48 billion from $1.50 billion a year earlier.

In the second quarter, Apple shipped 711,000 Macintosh units, down from 813,000 a year earlier and 743,000 in the first quarter. International sales accounted for 47% of its revenue.

Apple had forecast a "modest" net profit in a seasonally slow quarter and revenue of about $1.47 billion. Analysts were expecting earnings of two cents a share on revenue of $1.46 billion, according to Multex.

The company projected a slight profit in the current quarter, as sales are expected to be little changed from the second quarter.

Last week, it was reported that Apple was in talks to buy Vivendi's music unit for around $6 billion. Ahead of the earnings report Wednesday, Apple said it has never made an offer to invest in or acquire a major music company, responding to press statements attributed to Vivendi Universal board member Claude Bebear.

Despite a downturn in the PC industry, Apple has continued to invest in new products. During the quarter ended March 31, Apple released new notebook computers with 17-inch and 12-inch screens. Steve Jobs, Apple's chief executive, said that over 40% of the Macs it shipped were notebooks, the company's highest percentage ever.

In the quarter, gross margins were 28.3%, up from 27.4% in the year-earlier period. International sales were 47% of the quarter's revenue, the company said.

Unit shipments of iMacs, iBooks, and PowerMacs were all down from a year earlier and from the first quarter. Only the PowerBook computer posted growth with 166,000 units shipped, compared with 89,000 units a year earlier and 101,000 in the previous quarter.

URL for this article:
http://online.wsj.com/article/0,,SB105034340139435300,00.html

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Tim Naegele

www.naegele.com

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