Apple reported that financial results for its fiscal second-quarter had held steady from the same quarter last year, meeting its predicted figure. The company said its new flat-panel iMac kept demand strong during a continued weak period in the market for personal computers.
Revenue for the quarter was $1.5 billion, up 4 per cent from the same quarter last year, when Apple reported $1.43 billion in revenue, the company said in a statement.
Net profit from sales, however, was down from the same quarter a year earlier. Apple brought in $40 million this quarter, or $0.11 per-share, compared to a net profit of $43 million, or $0.12 per share, in its second quarter last year.
Analysts had expected the company to report earnings of $0.10 per share with revenue at $1.46 billion, according to a consensus estimate gathered by Thomson Financial/First Call. Apple had pegged revenue to be about $1.5 billion when it gave guidance during its first-quarter earnings call in January.
Macintosh sales up Boosted by the release of its new flat-panel iMac and its popular iBook laptop, Apple shipped 813,000 Macintosh units during the quarter, up 8 per cent from a year ago. Shipments of its iMac grew 24 per cent compared to the fiscal second-quarter last year, while shipments of its iBook – now available with a 14-inch display – grew by 156 per cent, the company said.
At least one analyst had expected Apple to miss forecasts for its fiscal second quarter. UBS Warburg financial analyst Don Young wrote in a research note last week that he doubted Apple would meet its financial targets “because of supply-constraints and rapid channel-stocking late in the quarter”.
The company began shipping its new flat-panel iMac during the Q2 2002, and has so far delivered 220,000 units since its launch, the company said Wednesday. However, it was forced to raise the price of the iMac by up to £100 last month due to an increase in costs for memory and LCD flat-panel displays.
Increast costs will hurt profits The increased costs will continue to affect Apple’s profits in the current quarter, Apple chief financial officer Fred Anderson said in a conference-call after the results were released. The price of memory-chips has tripled since Apple’s fiscal first quarter. LCD prices are up nearly 25 per cent and still rising, he said.
The profit Apple makes from iMac sales is also being affected because the company was forced use air-freight to ship its iMacs out of production facilities in order to get them to market more quickly. This creates additional costs, said Anderson. He added: “There’s a substantial unit-dollar between putting it on the water versus air-freight.
“We’re working on cost-reduction initiatives that should improve things by the fiscal fourth quarter. Air-freighting would be reduced as the company catches up with consumer demand for the iMac.”
Apple 'will outperform Wintel peers' An analyst from UBS Warburg last week lowered his outlook on PC makers Dell and Gateway, which, he said, are falling victim to the “New PC Economics” – a term used to describe the price-cuts and weakening demand that has hit manufacturers of Wintel machines.
The analyst wrote last week: “We no longer view Apple as being in a battle for PC market share – instead, we see the platform becoming a premium PC, capturing selective demand. We expect Apple to be able to ‘make its own weather’ and outperform its Wintel hardware peers.”
With Apple’s new iMac “selling very well,” UBS Warburg’s Young has forecast that Apple will show better-than-expected earnings-per-share figures during the second-half of the year.
Anderson said that Q3 forecasts point to revenue of $1.6 billion and earnings pe- share flat or up slightly from the $0.11 per-share reported in the March quarter.
Apple said it plans to invest more in research and development – which some other PC vendors are not doing, Anderson claims. It will also open an additional 20 Apple retail stores by the end of the calendar year, and beef up its presence at CompUSA stores.
Apple’s shares (AAPL) closed at $26.11 on the Nasdaq, last night gaining $0.37, or 1.44 per cent for the day.