Apple's $45 million net loss in its fourth quarter partially reflects losses in its investments, the company revealed yesterday.
The company took a write-down on certain equity investments of $49 million after taxes in the quarter. It was also hit by restructuring charges of $4 million, a $1 million charge on in-process r&d. Apple also cut inventories from 6.5 to 4 weeks. Apple chief financial officer Fred Anderson expects revenues to rise slightly over the next quarter.
A Reuters report cites SoundView analyst Mark Specker as saying: "You could argue that, given the inventory, Apple beat revenue in the quarter".
Alongside considerable sums invested – in the form of US Government securities – Apple maintains several significant investments in other tech sector companies. Apple's 2001 Annual Report confirmed significant investments in ARM Holdings, Akamai Technologies, Samsung and EarthLink.
As industry players, the softening market has affected Apple's investments. For example, the EarthLink investment caused a $114 million charge to Apple's earnings in the 2001 financial year, according to Apple's financial report last year.
The report said: "The combined fair value of these investments was $128 million and $786 million as of September 29, 2001, and September 30, 2000 respectively. Apple believes it’s likely that there will continue to be significant fluctuations in the fair value of these investments in the future."
Apple will reveal more details regarding the impact of the slow economy on its investments in its 2002 annual report.