Apple posts first loss in three years

Apple: "Planning a return to sustained profitability this quarter"

Apple Computer has reported its first loss in three years.

The iconic firm, famous for its Macintosh computers, said it had made a loss of $195m (£132m) in the quarter ended 30 December, compared with a $183m profit in the corresponding period the year before.

We don't have a better cystal ball than you... The US market is uncertain

John Joyce, IBM

However, the decline in earnings was not as steep as some analysts had feared.

Most had already substantially downgraded their expectations for the sector after a string of computer makers warned last year that much weaker sales would lead to disappointing earnings.

International Business Machines joined Apple in narrowly beating market expectations, reporting a 28% rise in fourth-quarter net earnings to $2.7bn.

Clues for 2001?

Analysts had hoped the results statements would provide some clues as to prospects for 2001.

"The key for investors is assessing when [earnings] estimates are going to stop declining," Bear Stearns analyst Andrew Neff said.

But IBM had few reassuring words to offer. "It's early in the year and we don't have a better crystal ball than you," IBM chief financial officer John Joyce said in a conference call.

"Clearly the US market is volatile and uncertain. However, we are entering 2001 with some momentum and a sense of confidence."

IBM said it remained comfortable with the consensus of earnings estimates for this year.

Businesses in Asia and Europe should counterbalance "short-term disruptions" in the US, it said.

Sales in October-December had risen 6% to $25.6bn, while for the full year net income increased 16% to $8.1bn.

Apple's medicine

Apple's revenue had collapsed to $1.01bn in the quarter from $2.34bn a year previously.

But the company said it had implemented changes that would set it back on a profitable path.

"We took our medicine last quarter and brought channel inventories back down to about five and a half weeks," chief executive Steve Jobs said.

"We're starting this year with a bang - shipping our new PowerBook G4 in January, our new 733 MHz Power Mac G4 in February and Mac OS X in March."

Added chief financial officer Fred Anderson: "We are planning a return to sustained profitability beginning this quarter.

"We now expect revenues for [the fiscal year] to be about $6bn."

Apple shares have slumped about 75% since early September.