Apple Computer Co, which couldn’t wait until this week’s earnings report to brag about its return to profitability, turned in just about what it promised. Interim chief executive Steve Jobs, speaking at MacWorld Expo in San Francisco last week, previewed net income of $45m, or $0.35 per share (CI No 3,320). On Wednesday the company posted actual net income of $47m, but earnings per share fell just short of the projection at $0.33. That compares to a loss of $120m ($0.92 per share) for the first quarter of 1997 and a loss of $161m in the September quarter. Revenue was $1.58bn for the quarter, a 25.9% slide from last year’s first quarter total of $2.13bn, providing ammunition for skeptics who feel the success won’t be easy to maintain. International sales accounted for 50% of total revenue. The return to the black was a long time coming for Apple, which lost about $1.8bn in its last two full fiscal years, posting just one profitable quarter in the previous eight. Gross profit margins rose to 22% during the quarter from 20% in the prior quarter and 19% a year ago. Unit sales for the quarter reached 635,000, lifted by strong sales (133,000, from a projected 80,000) of its new Power Macintosh G3 model, introduced November 10. But perhaps the biggest boost of the quarter was the reduction of operating expenses to $313m, from $353m in the prior quarter and $521m a year ago. That fact worries analysts, who generally expected revenues of about $1.7bn, leading some to question the viability of the company’s financial comeback. Apple’s balance sheet shows $1.19bn in cash, down 3% from the same period last year.
