Struggling Apple misses lowered estimate

Apple Computer failed to meet its downgraded profit estimates in its fourth quarter financial results on Wednesday, blaming poor sales.

The computer vendor reported net profit of $108m, or 30 cents a share, excluding profit from a stock sale. In late September, Apple warned that earnings would be between 30 and 33 cents. Analysts had revised their earnings per share estimates to 31 cents.

Before the warning, the consensus of industry analysts was for a profit of 45 cents a share, according to First Call/Thompson Financial. Since Apple's profit warning, its stock has lost more than 60 per cent of its value.

Including the sale of 7.1 million shares of ARM Holdings for $62m, Apple had a net profit of $170m, or 47 cents per diluted share, compared with $111m or 31 cents per diluted share in the same quarter last year. Revenue rose to $1.87bn, up by 40 per cent from last year.

Apple chief executive Steve Jobs said the company has identified several factors that contributed to the sales shortfall last quarter and is "taking strong steps to remedy them going forward".

He said September sales were "way below" the company's target, which left Apple with an unusually large inventory. Apple also blamed the shortfall on lower than expected education sales and a slower than expected start for the G4 Cube.

"Rather than reducing [the inventory] gradually over the next several quarters, we have decided to reduce it to a normal level by the end of this quarter," Jobs said. "This will result in a second disappointing financial quarter, even though our sell-through sales should be moderately strong.

"Our plan is to be back on track for the January quarter and we remain very excited about our products and programmes for 2001."

Apple shipped 1,122,000 units during the quarter, including more than 570,000 iMac systems.