On the heels of Apple's announcement of a better-than-expected $183 million profit for the first fiscal quarter of 2000, analysts told MacWeek they expect the company to continue to make strong financial gains this year.
In a conference call with financial analysts on Wednesday, Apple’s chief financial officer Fred Anderson (pictured) spelled out the company's first-quarter results.
Before Apple posted its results, First Call predicted the company's first-quarter earnings would total $0.89 per share, and PaineWebber predicted $0.92 per share – Apple's actual results amounted to $1.03 per diluted share.
As expected Apple's financial results for the quarter did not surprise Tim Bajarin, an analyst with Creative Strategies. "Considering iMac sales and the fact that typically 35 and 40 per cent of all Apple computers are sold during the holidays, it's not surprising" that Apple reported healthy financial results, Bajarin said. "It continues to underlie the fact that Apple has fully come back."
According to Michael Kwatinetz, a research analyst at Credit Suisse First Boston in New York: "It's very clear the company is back in an innovative mode, and that's driving business."
However, Kwatinetz added: "A little of (Apple's) Q1 revenue is a carryover from the previous quarter," adding that he estimated the amount to be "between $100 and 200 million".
"Apple had very good revenue growth with iMacs," he said. "We believe that iMacs were up 35 to 38 per cent year over year."
Unexpected Kwatinetz said two of Apple's statements were surprising. "Gross margins were lower than expected, which was tied into the extra mailing costs" for hardware shipped during Q4, and "sales of Mac OS 9 were lower than expected".
Despite those surprises, Kwatinetz said, Apple's success is "across the board, and (CEO) Steve Jobs deserves a lot of credit for that".
Analyst Louis Mazzucchelli with Gerard Klauer Mattison & Co of New York said Apple's results "beat everyone's expectations". The company "shipped lots of iBooks", Mazzucchelli said, "and "having less than a day of inventory is great."
New blood During the call with analysts, Anderson said that Apple needs to "continue to bring out products on schedule, and to bring new people into the company".
Mazzucchelli noted that while Apple's "turnover rate is among the lowest in Silicon Valley, they do need to bring in fresh blood and to keep cranking out products".
The outlook for Apple is positive for this year, Mazzucchelli said, adding: "It's likely estimates will go up Thursday."