Analysts were happy, if not surprised, with the contents of Apple's latest annual report, released Wednesday, outlining the company's financial health for the recently concluded fiscal year.

The upbeat report constitutes Apple's yearly Form 10-K filing with the US Securities and Exchange Commission. It covers the 1999 fiscal year, which ended Sept. 25, and contains financial information stretching back three years.

"This is the story of a great year," said analyst Lou Mazzucchelli of New York-based Gerard Klauer Mattison & Co. Inc. "Shareholders and potential shareholders should feel positive." Mazzucchelli said Apple enjoyed a steady cash flow during the past year - a situation he said will only get better as revenue increases. He also pointed to increased unit sales and inventory levels of less than two days.

However, he said he doesn't think the report "will have a big effect" on Apple's stock value or its ratings by investment firms. "Though the numbers are good, the people who follow [Apple's finances] should know all this already."

Analyst Jimmy Johnson of AG Edwards, agreed that the report held few surprises. "I don't think our outlook on Apple has changed" because of the information contained in the filing, he said, adding that he remains bullish on the company.

"We think there's a good chance of Apple beating estimates for the first quarter of 2000," Johnson said.

Johnson noted that the 10-K report did not contain any information regarding an Internet strategy from Apple, which the company has in the past mentioned to stockholders and analysts. "That would be the big thing we're looking for," he said.

"It'd make sense for Apple to partner with an ISP," Johnson said, "since it would get the company closer to the customer with almost no margin and no cost while providing a consistent revenue stream per customer." He cited PC maker Gateway as a "classic" example.

"All that'd be left is rolling in the Apple Store," Johnson said, though he said that would have to be done "gradually" to avoid alienating Apple product resellers.

Johnson said that although Apple's sales dipped slightly in the fourth quarter of 1999 because of availability problems, the company is "well positioned until March" in terms of meeting pent-up demand for products such as the consumer portable iBook and the desktop Power Macintosh G4 line.