Apple Computer had a buoyant second quarter, reporting a net profit of $135 million, up from $55 million last year, on revenue up by nine per cent to $1.53 billion.
Analysts had been predicting around $0.57 per share, but excluding special items, net profit for the quarter ended 31 March 1999 was $0.60 per share compared to last year's $0.38.
The strong results were inflated by special items amounting to $42 million, including an after tax gain of $50 million from the sale of 2 million shares in ARM Holdings, and a net restructuring charge of $8 million. Without these, net profit for the quarter would have been $93 million.
International sales accounted for 50 per cent of revenues while strong sales of the iMac and Power Macintosh G3s drove overall unit growth to 27 per cent year on year. Gross margins were 26.3 per cent, edging up from the previous quarter's 24.8 per cent. "We are delighted that Apple grew faster than the industry in its sixth consecutive profitable quarter," said Steve Jobs, Apple's apparently longterm, but still interim, chief executive. He added: "Demand for iMac exceeded our most optimistic forecasts, with Apple's share of the US retail and mail order desktop sales climbing as high as 12.5 per cent." Apple claims to leads the industry in asset management with one day of inventory, beating Dell for the third quarter in a row. Fred Anderson, Apple's chief financial officer, commented: "The strong demand for iMac and new Power Macintosh G3 computers combined with continued operational efficiencies and asset management improvements [resulted] in positive cash flow of $269 million." For the six months, net earnings were $287 million on $3.2 billion revenues, up from $102 million on revenue of $3 billion in the year earlier period.
While the iMac effect boosted Apple's desktop sales, and 32 per cent of US buyers were first timers, the company's laptop sales continued to languish and Apple provided no hints on how or when it plans to rejuvenate the laptop family.
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