Apple yesterday reported second-quarter profits of $160 million before non-recurring items, such as stock sales, up 72 per cent from a year ago.
The company also pushed its plans for a two-for-one stock split, which will be voted on at the company’s annual stockholder’s general meeting in Cupertino today.
The profit increase was driven by strong demand for the PowerMac G4 and new PowerBook notebooks, as well as improved operating efficiencies, Fred Anderson, Apple's chief financial officer, said yesterday.
Earnings per share for the quarter, which ended April 1, 2000, were 88 cents, up 47 per cent from a year ago and well ahead of First Call/Thomson Financial’s expectations of 81 cents per share.
On the up Revenue was $1.94 billion, up 27 per cent from a year ago, while gross margins were 28.2 per cent, up from 26.3 per cent from the same quarter last year, Apple said.
"We're very pleased to report our second consecutive quarter of strong unit, revenue and earnings growth," Anderson said.
The profit figure of $160 million excludes a $73 million after-tax gain from the sale of 1.5 million shares of ARM Holdings. Including the one-time gain, Apple reported a profit of $233 million, or $1.28 per diluted share, compared with $135 million, or 84 cents per diluted share, a year ago, the company said.
The firm's iMac computer continues to attract new users to the Macintosh platform, Anderson said. About 28 per cent of customers who bought an iMac in the second quarter were buying their first computer, while 17 per cent were switching from PCs running Intel chips and Microsoft Windows software, he added.
Apple sold 1,043,000 units during the quarter, up 26 per cent from a year ago. The sales included about 100,000 PowerBooks and 350,000 PowerMac G4s, Anderson said. Declining memory prices helped increase gross profit, per unit sold.
Apple in Europe International sales accounted for 51 per cent of revenue. European sales were particularly strong, climbing 36 per cent year over year. Sales in the Americas increased 28 per cent, while Japan and the rest of Asia climbed 12 and 13 per cent, respectively, Anderson said.
Apple’s planned two-for one stock split will take effect June 21, subject to the approval of shareholders at the company's annual meeting today. To qualify, shareholders need to be on record at the close of business on May 19, 2000, Apple said.
The financial results were announced after the US markets closed today. Apple's shares on the Nasdaq were trading at $121.13 at the close, down $5.75 from yesterday. On the after hours market, the shares enjoyed brisk trading to close at $126.5.
Apple's shares hit an all-time high of $150.75 on March 23, but were selling for as little as $109.25 on Wednesday last week in the midst of the slump in the technology sector stocks. IT stocks, including Apple's, have quickly rebounded from the slump this week.