More strong earnings expected from Apple

Apple's run of good news will likely continue today when the closely watched company reports what is anticipated to be a seventh consecutive profitable quarter.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers
3 min read
Apple Computer's streak of good news will likely continue today when the closely watched company reports what is anticipated to be a seventh consecutive profitable quarter.

Seemingly going from success to success, Apple is expected to turn in earnings of 64 cents a share for its fiscal third quarter, according to a consensus of analyst estimates from First Call. Strong financial results would cap last week's six-year stock price high of $54.50.

Apple's earnings "look just fine. [Steve] Jobs is doing great...and he's doing a great job of managing expectations," said Kimball Brown, an analyst at GartnerGroup Dataquest.

As recently as two years ago, Apple appeared to be tottering after the abrupt resignations of chief executive Gilbert Amelio and executive vice president Ellen Hancock left the company's leadership and future in question. But Jobs, ousted from the company's leadership some 10 years earlier, has stepped in as interim chief executive to rally the company he helped found.

Apple's rebound largely stems from the iMac computer, introduced more than a year ago. But the Cupertino, California, company also has been pushing forward with new product development.

In the near future, the user-friendly and colorful designs of iMac will carry over to notebooks and other products. Previews of a consumer notebook are anticipated at the Macworld Expo trade show next week in New York.

As previously reported, the notebook will come in a variety of colors like the iMac and likely come out later in the year. The system will likely sell for between $1,200 and $1,500 and will compete against discount consumer notebooks that have already been released by major PC makers, sources say.

Apple has refused to comment on unannounced products.

Later in the year, Apple is expected to come out with a new generation of the popular iMacs with larger screens, and the company may even re-enter the handheld market with an Apple-branded PalmPilot device, said sources.

Apple needs to extend interest in the Mac beyond the Mac faithful, said Dataquest's Brown. "My concern is that the 'installed base' is running out of gas. Can they continue to turn the base?"

Products further down the road--most likely next year--include new systems based on the powerful PowerPC G4 processor, the successor to the G3 chip used in contemporary Macintosh systems.

A Motorola spokesperson said today that the company plans to begin shipping G4 processors in the second half of this year. Apple products based around the chip, however, aren't likely to materialize until later.

Meanwhile, Richard Doherty, president of Envisioneering Group, said sources close to Apple have told him that the company has been working on a "single-chip iMac," akin to the system-on-a-chip movement at companies such as IBM and National Semiconductor.

On the software side, an upgrade to the Macintosh operating system is expected in the fall, and by early 2000 Apple will release a new operating system called Mac OS X, both of which should provide a significant boost to profit margins.

"People are looking at a company that is valued as a PC hardware company, but this is really a systems company," said wrote BancBoston Robertson Stephens analyst Alex Mou.