S&P Says Apple's Q4 Loss Will Not Effect Apple's Stock Ratings

by , 2:00 PM EDT, October 17th, 2002

Standard & Poor's (S&P) released a statement today concerning Apple's Q4 loss reported yesterday. According to the S&P, Apple's stock ratings will not be hurt by the loss, which was incurred largely because of a write-down in the value of their holdings in Akamai and Earthlink. In the statement, Apple's profit before non-recurring charges was emphasized. The S&P further emphasized that their outlook on Apple's stock was partially caused, and reliant upon, Apple's cash holdings of more than US$4 billion. That statement:

Apple Computer Corp. recently reported flat revenues of $1.4 billion for the fourth quarter ended Sept. 28, 2002, and a net loss of $45 million. Excluding nonrecurring items, net profit for the quarter would have been $7 million, compared to a net profit of $66 million a year ago. Standard & Poor's does not expect current earnings weakness to have an impact on Apple's ratings.

Despite flat revenues and a declining income trend over the past four quarters, Apple has maintained cash balances in excess of $4 billion and a strong balance sheet. Apple's liquidity provides it with the financial flexibility to weather difficult market conditions and depressed IT spending. However, Standard & Poor's rating and outlook incorporate the assumption that Apple will maintain positive EBITDA and cash balances of about $4 billion.

You can find the statement at Yahoo!'s financial Web site.

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