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Apple Posts Loss Of US$45 Million, US$7 Million Profit Before Non-Recurring Costs

Apple Posts Loss Of US$45 Million, US$7 Million Profit Before Non-Recurring Costs

by , 5:30 PM EDT, October 16th, 2002

Apple posted its Q4 earnings results today (see our live coverage from the press conference for more information). The company posted a US$45 million loss (13 cents per share), far below the break even results it had projected, but those losses stemmed from non-recurring charges. Before those non-recurring charges, Apple posted a profit of US$7 million.

For fiscal 2002, the company posted a US$65 million profit, compared to a US$25 million loss in 2001. Sales during the year were up some US$38 million. The details are in the press release below:

Apple® today announced financial results for its fiscal 2002 fourth quarter ended September 28, 2002. For the quarter, the Company posted a net loss of US$45 million, or US$.13 per share. These results compare to a net profit of US$66 million, or US$.19 per diluted share, in the year-ago quarter. Revenues for the quarter were US$1.44 billion, flat with the year ago quarter, and gross margins were 26.4 percent, down from 30.1 percent in the year-ago quarter. International sales accounted for 35 percent of the quarter's revenues.

The quarter's results included several non-recurring items: the write-down of certain equity investments totaling US$49 million net of tax; a restructuring charge of US$4 million net of tax; an in-process R&D charge of US$1 million net of tax; and the reversal of a portion of a previous executive compensation expense resulting in a favorable impact of US$2 million. Excluding these non-recurring items, the Company's net profit for the quarter would have been US$7 million, or US$.02 per share.

Apple shipped 734 thousand Macintosh® units during the quarter, down 14 percent from the year-ago quarter.

"Though our industry continues to struggle, we had some bright spots this quarter -- Mac OS X v10.2 Jaguar is a big hit and on track to have 5 million users by the end of this year, our 'Switchers' campaign is very well received and is attracting a lot of new customers, and our retail stores sold over US$100 million and hosted 2.25 million visitors this quarter," said Steve Jobs, Apple's CEO. "Looking forward, we do not expect our industry to pick up anytime soon, though we're hoping to help put a lot of iPods, iMacs and iBooks under trees this holiday season. With the stability of our rock-solid balance sheet, Apple will continue to invest through this downturn to create the industry's most innovative products and best buying experience."

"We were extremely pleased with our ability to achieve our revenue target for the fourth quarter while reducing channel inventory to a normal level," said Fred Anderson, Apple's CFO. "Continued strong asset management enabled us to maintain a solid balance sheet with over US$4.3 billion in cash. Looking ahead to the first quarter of 2003, we expect revenue to be up slightly from the September quarter, and expect a slight profit for the quarter before non-recurring items."

For the year, the Company reported net earnings of US$65 million on revenues of US$5.74 billion, compared to a net loss of US$25 million on revenues of US$5.36 billion in 2001.

Apple closed lower today at 14.56, down 0.60 (-3.96%), on moderate volume of 5,486,720 shares trading hands. Today's results were released after the markets closed. Look for a formal analysis from TMO tomorrow.

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

The Mac Observer Spin:

These results aren't bad considering the market, and Apple remains one of two profitable PC makers, Dell being the other (HP posted a profit, but its PC division had sizeable losses). Sales were up, and the company posted a profit. Not bad when every other company, again, not counting Dell, saw PC sales trend downward. It remains to be seen how the markets react.

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