Apple Computer Inc delivered its fifth consecutive profitable quarter yesterday, as promised by interim CEO Steve Jobs at MacWorld last week (CI No 3,569), delivering a fiscal first quarter profit of $152m, or 95 cents a diluted share, on revenues of $1.7bn. Compared with the $47m income it posted in the same quarter last year, net income for the quarter ending December 26 more than tripled, while revenues rose 8% from the $1.6bn reported a year ago. Unit growth rose an impressive 49% year-on year, way above the industry average of around 12%, although this figure was driven by the sale of 519,000 iMac computers during the quarter. 800,000 have be sold in total since the launch last August. That, coupled with Apple’s gradual withdrawal from high- end imaging and printing products, bought the average value of unit sales down to $1,776, compared with $1,840 last quarter and well above $2,000 last year. Apple still managed to pull in gross margins up to 28.2% from 22.4% a year ago, its highest figure for four years. It kept costs down by outsourcing board manufacturing and implementing a new supply-chain system, using SAP AG software, and improved inventory management which meant that it ended the quarter with only two-days of inventory, compared with seven days at Dell Computer Corp, the company most often credited with the best inventory control in the business. The quarter’s figures were also bolstered by $29m gained from Apple’s one-off sale of its 2.9 million shares of ARM Holdings Plc, which went public last year, and benefited from strong upgrades of the MacOS operating system to the new version 8.5, which contributed revenues of $45m, $30m more than the usual upgrade revenues. And Apple now holds $2.6bn in cash and short-term investments. Will the growth continue? Apple is cautious, with chief financial officer Fred Anderson saying that the next quarter will show weaker unit growth and revenue due to slower MacOS upgrade sales and a seasonal fall-off in the education market. Anderson still expects significant growth, however, and says education sales will pick up again in the third quarter. He also said increased sales from Apple’s expected new low-end portable might also boost the second half of the calendar year. The list price of the iMac, which was cut by $100 last week, is likely to continue to decline over the year, although Anderson said there were signs of firmness in the LCD and DRAM markets that might arrest the rate of decline somewhat. Apple is still not back to the glory days of around four years ago, when its quarterly revenues were running above $3bn.
