Apple To Report 1st Quarter Loss This Week

by , 7:00 AM EST, January 15th, 2001

Apple will be reporting its fiscal 1st Quarter earnings this week on Wednesday, after the markets close. The company is expected to report its first loss since Steve Jobs took over the company three years ago. Warnings of this anticipated loss helped spark a large drop in the company's stock value in December of last year. Apple suffered from increased inventory on hand in the face of a market-wide slowdown of the computer market. Apple has also admitted that they missed the CD-RW revolution and recently introduced PowerMac G4 models to correct this.

In addition, they saw a large drop in education sales related to changes in their education sales model that were introduced at exactly the wrong time. The three things combined met for a huge revenue decrease that Apple has said will be in the range of US$600 million less than prior projections.

The Mac Observer will be covering the earnings report and the company's conference call with an initial brief immediately after the announcement. We will follow it up with a detailed analysis on Thursday morning.

The Mac Observer Spin:

The real question is whether or not Steve Jobs and Fred Anderson left any wiggle room in their new guidance. Guidance is meant to be just that, guidance for how a company will perform so that the Stock Market will have time to react accordingly. In the best of times, this can mean a rise in stock value, while the worst of times will see a precipitous drop. Judging by the price drops introduced by Apple in the week prior to MACWORLD, it is likely that Apple still had inventory left to sell at that time, which was after the quarter about to be released ended. There has been no indication from the company on how successful those price cuts were. It will be interesting to see how the company's stock performs during the next three trading sessions.

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