The loss for the first quarter at Apple Computer Inc in the end came out at $120m – a little better than the $150m that had been bandied about after its warning – but Standard & Poor’s Corp was frantically waving warning flags over the company. The company said its gross margin rose to 19% in its fiscal first quarter from 15% in the year-ago quarter, but that was little consolation since it fell from 22% in the September quarter. Its cash position at the end of the quarter was $1.8bn. The worst number was the fact that, coming off the dullest quarter of the year and onto the liveliest, it sold only 923,000 units in the first quarter of fiscal 1997, down 1% from the fourth quarter, when no- one buys anything except clear-out machines and bargains. The weakness in demand for Performa products necessitated aggressive pricing and rebate activities that adversely affected gross margins, Apple said, adding those actions, coupled with the overall unit shortfall, resulted in the big loss for the quarter. As a result of the first quarter results, it plans to develop additional restructuring programmes during the second quarter with the goals of reducing its break-even point to $8bn in annual revenues and enabling it to return to profitability by year-end.
