The computer maker is expected to post its third consecutive quarter of profits when it reports third-quarter results July 15, and it also has been on a product roll. Last month, Apple trotted out a new line of notebooks. In addition, its newly introduced iMac is expected to ship next month--marking a reentry into the consumer space--and sales of its Power Macintosh G3 systems introduced last November have bolstered lagging sales.
These new offerings come as Apple has been streamlining its lineup, an effort that has included cutting loose such projects as the handheld Newton and the portable eMate.
"Before [interim CEO Steve Jobs] stepped in, Apple was dripping with potential, but it wasn't very focused," said Lou Mazzucchelli, an analyst with Gerard Klauer Mattison. "It didn't have clarity and focus and that is what Steve has brought."
When former chief Gilbert Amelio and other executives resigned last July, speculation was that the company was in disarray. Apple's worldwide market share had slipped from nearly 10 percent in 1993 to less than 5 percent; the Mac maker also had gotten away from targeting the home user.
Between 1996 and 1997, Apple's U.S. market share fell from 7.3 percent to 4.1 percent, according to market research firm Dataquest. But the latest figures from the first quarter of 1998 show Apple's U.S. share holding stable at 4 percent.
Executives are taking another look at the consumer market--which Apple had moved away from in recent years--with the return of the all-in-one iMac computer, which retailers expect will be met with strong sales.
Under Jobs, the Cupertino-based computer maker has posted two straight quarters in the black by focusing on high-profit products and cutting costs. Last week, the company announced more layoffs at a plant in Ireland, which could help improve the bottom line.
Moreover, the company has focused on computers for professionals and consumers and has maintained its focus on the publishing and educational markets.
Apple is coming off a year that is shaping up to be vastly different than its prior year, in which the computer maker last year reported a net loss of $1 billion, suffering from a steep decline in revenues and falling market share.
Analysts, however, are not ready to trumpet Apple's turnaround until it has posted several consecutive quarters of year-over-year revenue growth, Mazzucchelli noted. He added he expects Apple to report third-quarter revenues of $1.5 billion, up slightly from the previous quarter due to a "little pop" in education sales, while executives have told Wall Street to expect flat sequential revenue growth.
In the third quarter, however, Apple may see some year-over-year revenue increase, Mazzucchelli said, anticipating earnings of 42 cents a share.
Meanwhile, analysts expect the Mac maker to report a third quarter profit of 33 cents a share, according to First Call.
A.G. Edwards & Sons has an "accumulate" rating for Apple and expects third quarter earnings of 35 cents a share. Jimmy Johnson, an associate analyst with the brokerage firm, said Apple is not growing sales but trying to get its installed base back.
"They have the iMac coming out, which Apple has targeted to the consumer," Johnson added. "That's a substantial market, and if they gain that back sales will continue to grow."
He noted A.G. Edwards expects fourth-quarter earnings of 39 cents per share based on the strength of G3 PowerBook sales and the iMac.