After Last Month's Warning, Apple Beats Lowered Expectations - TheStreet

After Last Month's Warning, Apple Beats Lowered Expectations

Looking forward, the company sees a very strong December quarter.
Author:
Publish date:

After warning of an earnings shortfall last month,

Apple Computer

(AAPL) - Get Report

beat the Street's lowered expectations late today.

The company said that in its fiscal fourth quarter it earned $90 million, or 51 cents a diluted share, excluding one-time gains and charges. Analysts polled by

First Call/Thomson Financial

had forecast that Apple would earn just 45 cents a share, a sharp cut from their original projections of 76 cents a share before the warning.

Apple's results were released after the stock market closed and the company's shares rose more than 4 points in after-hours trading. Earlier, they ended regular

Nasdaq

trading down 3 11/16 at 64 1/32.

Including one-time items totaling $21 million, Apple reported net income of $111 million, or 63 cents a diluted share, compared with $106 million, or 68 cents a diluted share, a year earlier. Revenues fell 14%, to $1.34 billion from $1.55 billion in the 1998 quarter.

"With our product transitions during the second quarter behind us, and an order backlog of over $700 million, we're poised for a very strong December quarter," Fred Anderson, Apple's chief financial officer, said in a statement.

While an order backlog led Apple to warn the Street of dismal earnings this quarter, the company said it has remedied the delivery problems.

The company said it has received orders for more than 300,000 iBooks and 250,000 iMacs.

Backlog is running $500 million higher than in the comparable quarter last year, the company told analysts in a conference call this afternoon.

In its earnings warning, the Cupertino, Calif.-based company had blamed

Motorola

(MOT)

for failing to supply enough G4 processors for its new showpiece Power Mac G4 computers. Motorola countered that there were no delivery problems, just healthy high demand, and said that it was working with Apple on a delivery schedule.

The company will adjust processor speeds in the Power Mac G4s to meet demand. They will include processors that run from 350 to 450 megahertz, priced from $1,599 to $3,499.

IBM

(IBM) - Get Report

will also start supplying G4 processors, Apple said. Motorola said IBM was just licensing the G4 to sell to Apple.

"We are disappointed that we have not been able to meet all of Apple's demands to date, and are working diligently to rapidly remedy the shortfall," Motorola said in a statement. "As we have said before, this is a temporary situation."

The Sept. 21 Taiwan earthquake, which Apple blamed for some production lags this quarter, left no lasting damage, the company said. There was no structural damage to Apple facilities in Taiwan, the company told analysts in a conference call. The plants are now operational, though they lost one week's production of Power Books and Ibooks in September.