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Laptop sales lift Apple earnings

The computer company tops analyst estimates by 2 cents per share in the second quarter, posting earnings of $14 million, or 4 cents per share.

3 min read
Buoyed by strong laptop sales, Apple Computer on Wednesday posted second-quarter earnings and sales that narrowly topped analysts' estimates.

For the three months ended March 29, Apple posted earnings of $14 million, or 4 cents per share, on revenue of $1.475 billion. That compares with earnings of $40 million, or 11 cents per share, on revenue of $1.495 billion in the same quarter a year ago.

Apple was expected to post earnings of 2 cents per share on revenue of $1.46 billion, according to earnings tracking firm First Call. In January, Apple predicted that it would have a "slight profit" with sales roughly flat with the $1.47 billion it posted for the December quarter.

In a statement, Apple predicted more of the same for the current quarter.

"Looking ahead to the third quarter of 2003, we expect revenue to be relatively flat with the March quarter and expect a slight profit for the quarter," Apple Chief Financial Officer Fred Anderson said in a statement.

On a conference call with analysts, Apple said it expects to have 70 stores open by the end of the year, up from 53 today. The new stores will include a large store on Chicago's Michigan Avenue. The Mac maker had not previously said how many stores it planned to open this year.

Apple said it shipped 711,000 Macs during the past quarter, 40 percent of which were notebooks. That?s the highest percentage ever for Apple. Anderson said the company ended the last quarter with a backlog of orders for its 17-inch PowerBook but that Apple expects to work through that shortly. "We are now through the (starting phase of) manufacturing and are quickly catching up," he said.

"Our 'year of the notebook' is off to a great start, led by the incredible demand for our new aluminum 12-inch and 17-inch PowerBook G4s," CEO Steve Jobs said in a statement.

Although notebook sales were strong, sales of the iMac dropped substantially from the prior quarter and a year ago. Apple sold 256,000 iMacs and eMacs in the March quarter, down from 298,000 in the December quarter and 372,000 models sold a year ago. The company sold 78,000 of its iPod digital music players in the quarter, with nearly half of those being devices that connect to Windows-based PCs.

Apple also saw weak sales of its high-end desktop machines typically sold to graphic designers and others in the publishing and media industries.

"Sales of Power Mac G4s continue to be sluggish throughout the quarter," Anderson said on a conference call with analysts.

The education market--a key area for Apple--also continues to be weak, with sales down 14 percent from a year ago, although laptop sales were comparatively strong.

Earlier Wednesday, Apple denied that it had made any offer to invest in or acquire a record label, although the company would not comment on whether it had held talks with Vivendi Universal.

Also, Apple has apparently patched up differences with several resellers. A source familiar with the situation said that Dell Computer, Fry?s Electronics and Micro Center have all signed new deals with Apple after earlier balking at signing a new contract.