Apple Computer has reported a net loss of $US56 million, or 44 cents a share for the third quarter, surprising Wall Street analysts who had predicted the loss to be substantially higher.
Apple's $56 million net loss for the third quarter ended June 27, compares to a net loss of $708 million, or $5.64 per share in the second quarter of this year and a net loss of $32 million, or 26 cents per share, in the year-ago quarter.
Revenues for the quarter were $1.7 billion, compared to $1.6 billion in the second quarter and $2.2 billion in the third quarter last year.
In the hours before the 5pm announcement, Apple's shares continued to climb, closing at US$16.250, up 31 cents and trading as high as $16.375. After chairman and CEO Gil Amelio's resignation last week, shares dipped on Thursday down 3.2% to $13.25, but bounced back up 15% on Friday $15.19.
Analysts attribute the increased investments in Apple's stock to some of the options the company has to improve its situation, including: the chance of a takeover, restructuring Apple into specialized, smaller hardware and software companies, new leadership with a newly appointed CEO and new directions Apple may take.
Analysts polled prior to the announcement had estimated Apple's losses to top $77 million or 61 cents a share.
Despite the better-than-expected results, Apple's management no longer expects a return to profitability in September, as its former CEO Gil Amelio had predicted prior to his resignation last week.
"Our financial goals are to continue to reduce operating expenses and to return the company to sustainable profitability," said Apple's chief financial officer Fred D. Anderson, who declined to predict when the company will report black numbers.
"The uncertainly is related to our inability to predict revenues right now," Anderson said when asked why Apple is not stating its expectations following the results.
Apple's revenues in the third quarter were up 8.5%t compared to the previous quarter, driven by strong sales into the education market, Anderson said. However, strong sales of PowerMacs were offset by slumping PowerBook sales, he said.
Apple's unit sales in the Americas were up 12% in the third quarter compared to the previous quarter, while sales in Japan grew a stunning 60%, Anderson said.
Also as a result of improved operations in Europe, Apple was able to buck the industry's downward trend in some of the sluggish European markets, posting higher unit sales in UK - up 19%t - while sales in Germany increased by 37% sequentially. Sales in France were flat.
Continuing its search for a new CEO, Apple's current management said they were looking for one individual, not a team.
"We don't believe in leadership by committee," Anderson said, when asked if the company is considering several top executives who could share the responsibility of the CEO.
As for Apple co-founders Steve Jobs and Steve Wozniak, Anderson said one is in and the other is not.
"We spent two full days with Steve Jobs this week, he is very energetic and provides a lot of creative ideas," Anderson said, adding that Jobs wants to remain CEO of Pixar. "Steve Wozniak was advisor to Gil Amelio and following his departure he is no longer. We have a lot of respect for him and I am sure he will remain close to the company."
Anderson also said since Amelio's departure Apple has not been approached with any takeover plans by another company. In addition Anderson said Apple's current situation and Amelio's departure have not had any impact on the company's relationship with its PowerPC partners IBM and Motorola.
Apple Computer Inc. can be reached on the Web at http://www.apple.com/.