iMac boosts Apple earnings
- 18 April, 2002 09:09
Apple Computer has reported financial results for its fiscal second quarter that held steady from the same quarter last year. The company said its new flat-panel iMac kept demand strong during a continued weak period in the market for personal computers.
Revenue for the quarter was $US1.5 billion, up 4 per cent from the same quarter last year when Apple reported $US1.43 billion in revenue, the company said in a statement.
Net profit from sales, however, was down from the same quarter a year earlier. Apple brought in $US40 million this quarter, compared to a net profit of $US43 million in its second quarter last year.
Boosted by the release of its new flat-panel iMac and its popular iBook laptop, Apple shipped 813,000 Macintosh units during the quarter, up 8 per cent from a year ago. Shipments of its iMac grew 24 per cent compared to the fiscal second quarter last year, while shipments of its iBook -- now available with a 14-inch display -- grew by 156 per cent.
At least one analyst had expected Apple to miss forecasts for its fiscal second quarter. UBS Warburg financial analyst Don Young in a research note last week wrote that he doubted Apple would meet its financial targets "because of supply constraints and rapid channel stocking late in the quarter".
The company began shipping its new flat-panel iMac during the quarter, and has so far delivered 220,000 units since its launch, the company said. However, Apple was forced to raise the price of the iMac by $US100 last month due to an increase in costs for memory and LCD flat-panel displays, it noted.
The increased costs will continue to affect Apple's profits in the current quarter, Apple chief financial officer Fred Anderson said in a conference call after the results were released. The price of memory chips has tripled since Apple's fiscal first quarter, and LCD prices are up nearly 25 per cent and still rising, he said.
The profit Apple makes from iMac sales is also being affected because the company was forced to ship its iMacs out of production facilities by air freight in order to get them to market more quickly, which creates additional costs. "There's a substantial unit dollar between putting it on the water versus air freight," Anderson said.
"We're working on cost reduction initiatives . . . most of that should improve by the fiscal fourth quarter," he said, adding that air freighting would be reduced as the company catches up with consumer demand for the iMac.