Apple Forecasts Quarterly Loss of Up to $150 Million
Apple Computer Inc., citing weak consumer demand, said late Friday that it expects to report an operating loss of as much as $150 million for the first quarter ended in December.
In a statement, the computer maker said revenue for the quarter is expected to be about 10% below the $2.3 billion reported in the fourth quarter. The troubled company indicated that additional restructuring, possibly including layoffs, might be necessary as a result of the weak sales.
The announcement comes as Apple prepares to unveil crucial long-term technology strategies at the Macworld Expo in San Francisco next week. Although it comes as no surprise that Apple is losing money, the magnitude of the loss was far greater than most Wall Street analysts were anticipating.
Apple announced late last month that it would bring back co-founder Steve Jobs as a part-time consultant, acquire his Next Software Inc. for $400 million, and use the Next technology as the centerpiece of a next-generation software operating system to replace the aging Macintosh.
But many questions about the new strategy remain unanswered, and market researchers say uncertainty about the company’s future has dissuaded many would-be customers from buying a Macintosh.
Chairman Gil Amelio, who was installed early last year to turn the company around, said in a statement Friday: “These results suggest that we need to reduce Apple’s cost infrastructure so that we can achieve break-even results at a revenue level of $8 billion.”
Apple had revenue of $9.83 billion for the fiscal year that ended in September--and that figure was 11% lower than the year before.
Apple, based in Cupertino, Calif., said it expects to report an operating loss of $100 million to $150 million for the quarter, or 80 cents to $1.20 a share, when actual results are announced Jan. 15. In the year-ago quarter, Apple posted a net loss of $69 million, or 56 cents a share, on revenue of $3.1 billion.
According to First Call, analysts had expected Apple to report a first-quarter loss of about 4 cents a share.
A spokesman for Apple said consumer demand was soft during the quarter, which affected mostly the Performa line.
By comparison, the PowerBook laptop computer and Power Macintosh computer products, both of which are geared toward business customers, exceeded the company’s internal forecasts. But PowerBook revenue was hurt by product shortages.
In its fourth quarter, Apple reported a profit of 20 cents a share and operating income of $6 million, after three consecutive quarters of losses. Apple made its forecast after the close of stock-market trading. Its shares rose 75 cents to $21.75.
