Apple Computer has reported fourth-quarter earnings of $US90 million, or 51 cents per diluted share, before nonrecurring items. The company also announced a deal with IBM to help it overcome a shortage of processors for its new G4 PowerMac computers.
Apple's earnings are down from $106 million, or 63 cents per diluted share, in the same period last year. However, the computer maker beat the consensus estimate of financial analysts, who expected it to profit by 45 cents per share, according to First Call.
The results exclude a $21 million boost from nonrecurring items, including the sale of 3 million shares in Arm Holdings PLC and a restructuring charge. Including those items, Apple reported income of $111 million in the quarter, or 63 cents per diluted share. Revenues for the quarter were $1.34 billion, down 14% from a year ago, Apple said.
The company also announced that it will ship slower versions of its new PowerMac G4 computer, which was announced in August, than it had originally planned. The 500MHz system won't be introduced until the first calendar quarter of next year. The G4 lineup now includes models with 350MHz, 400MHz and 450MHz processors, which are priced at $1,599, $2,499 and $3,499, respectively.
Apple said last month that Motorola , which is manufacturing the G4 processors, had run into problems and wouldn't be able to keep up with demand for the chips. At the same time, Apple warned that the shortage would cut into its earnings for the quarter just completed.
"Despite receiving orders for over 150,000 (PowerMac G4) systems during the quarter, we were able to ship only 64,000 G4 units, which was far short of our plan," Fred Anderson, Apple's chief financial officer, said in a conference call with press and analysts.
Apple said today that to help address the problem, IBM will begin manufacturing the G4 processors in the first half of 2000, giving Apple two suppliers.
The PowerMac G4 wasn't the only product for which Apple had trouble meeting demand. The company ended the quarter with "an extraordinarily large backlog" of more than 400,000 undelivered Macintosh systems, representing more than $700 million worth of business, Anderson said.
The company received orders for more than 200,000 iBooks during the quarter, but shipped only 6,000. The iBook is the colorful portable equivalent of its iMac computer aimed at consumers.
Apple warned when it introduced the iBook at Macworld in July that supplies would be limited. The shortage was compounded by a slower-than-expected manufacturing ramp, and last month's earthquake in Taiwan, which cost the company one week of production on both iBooks and iMacs at the end of the quarter.
Apple expects to catch up with the backlog on G4 desktops in November, although iBooks may remain in short supply throughout the quarter, Anderson said
The company shipped 772,000 computers altogether in the quarter, down 7% from a year ago. iMacs accounted for 58% of units shipped, followed by PowerMacs at 28% and PowerBooks at 13%. iBooks and servers accounted for less than 1% each of total units shipped, Anderson said.
International sales accounted for 35% of the quarter's revenues, Apple said.
"We are delighted by the response to our new products; we have received orders for over 250,000 new iMacs in the first week since its announcement, and over 300,000 iBooks since its announcement in late July," Steve Jobs, Apple's interim chief executive officer, said in a statement. "We are geared up to ship all of our products in high volume this quarter."
For the fiscal year, which ended Sept. 25, Apple generated revenues of $6.1 billion and net earnings of $601 million, or $3.61 per diluted share. These results compare to fiscal 1998 revenues of $5.9 billion and net earnings of $309 million, or $2.10 per diluted share, Apple said.
Apple said it doesn't expect the earthquake in Taiwan to affect revenues in the current, December quarter. The company suffered no damage to any of its production facilities, all of which are now fully operational. It lost power for a week at the end of the quarter, and power outages and rationing continue to occur.
"Some component supplies were affected, but we expect the situation to be fully resolved by the end of the quarter," Anderson said. "At this point we do not expect the Taiwan earthquake to have a material impact on our planned revenues for the quarter."
Apple's shares closed at $64.03 on the Nasdaq stock market, down $4.66 from yesterday's close. The financial results were announced after the close of market.
"The September quarter proved to be a period of significant product transition. Demand for all of our new products has been incredibly strong," Anderson said.
Apple, in Cupertino, California, can be reached at +1-408-996-1010, or at http://www.apple.com/.