Apple Computer Inc said on Wednesday fiscal second-quarter profit fell less than expected, helped by sales of new, more-powerful computers. The company cut sales forecasts for the next two quarters.
The company's shares rose as much as 18 percent after it said profit excluding investment gains and losses in the period ended March 31 fell 75 percent to US$40 million, or US$0.11 a share, from US$161 million, or US$0.44, in the year-earlier period. Sales declined 26 percent to US$1.43 billion from US$1.95 billion.
Apple's better-than-forecast profit follows two quarters in which sales lagged estimates because demand for computers slowed.
Apple benefited from sales of the one-inch-thick titanium laptop and new PowerMacs for graphic designers introduced in January, Chief Financial Officer Fred Anderson said. Those products are more expensive and profitable than computers for home users.
"It was a solid quarter in a tough environment," said David Bailey, an analyst with Gerard Klauer Mattson, who rates the shares "neutral."
Excluding the gains, analysts expected the company to earn US$0.01 a share on sales of US$1.38 billion, the average forecast in a poll by First Call/Thomson Financial.
Apple shares rose as high as US$27 in after-hours trading after the results were released on Wednesday. They had risen US$2.39 to US$22.79 in regular trading and have gained 53 percent this year. Shares traded in Tokyo yesterday morning rose as much as 17 percent.
Apple sold 115,000 of its new laptops in the quarter and won't be able to meet demand until the end of this month, Anderson said.
While that product sold well, consumer demand remains sluggish and sales in Europe are weakening, Anderson said. Apple now expects sales for the year to be US$5.6 billion to US$5.8 billion after earlier predicting US$6 billion, Anderson said. The average analyst estimate calls for sales of US$5.89 billion, according to a poll by First Call.
Apple won't match price cuts from Dell Computer Corp. and others seeking to spur demand, Anderson said.
"We're not in the commodity game," he said.
Profit was helped because costs for parts such as flat-panel displays fell, he said. The Cupertino, California-based company reduced inventory in the second quarter from more than five weeks of supply to four weeks, Anderson said.
In the next few months, Apple needs to focus on selling to schools and students, Bailey said. Dell eclipsed the company in the education market, Apple's traditional stronghold, last year.
Apple also introduced its new operating system software, OS X, pronounced o-s-10, on March 24. Sales of OS X accounted for US$19 million in revenue for the quarter.
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