Apple back in black but slices outlook

PowerBook sales have been the bright spot for Apple Computer, which has scraped through the March quarter to report a profit that even beat estimates.

However, the company also reduced its outlook for the second half of its fiscal year.

Excluding a gain and a write-down related to its investment portfolio, the company earned US$40 million in its second quarter on revenue of US$1.43 billion.

Revenue was expected to be $1.38 billion for the period, which ended March 31.

The quarterly earnings are in sharp contrast to a brutal US$247 million operating loss in Apple's fiscal first quarter.

"We had a lot to accomplish in the March quarter, and we're very pleased that our results exceeded expectations in a very challenging environment," Apple Chief Financial Officer Fred Anderson said on a conference call with analysts.

As for its outlook, the company now expects to bring in US$3.2 billion to US$3.4 billion during the second half of its fiscal year -down from a prior estimate of US$3.6 billion.

Shipments up
The computer maker said it shipped 751,000 Macintoshes during the quarter. It recorded an US$89 million after-tax gain from selling part of its stock in chip designer ARM Holdings, but that was largely offset by an US$86 million write-down of some of its equity investments.

Falling prices for parts helped boost Apple earnings, Anderson noted.

Anderson characterized Apple's Titanium PowerBook G4 as a hit, saying the company shipped 115,000 of the notebooks in the quarter and expects to reduce its backlog of orders for the sleek portable to a normal level by the end of April.

PowerBook sales were indeed the bright spot, with shipments of both old and new models up about a third from the same quarter last year in terms of both units and dollars. By contrast, Apple shipped 37 percent fewer iMacs and brought in 47 percent less revenue from the consumer desktops. Unit shipments of iBooks were off 52 percent and revenue was down 47 percent. PowerMac shipments dropped about 30 percent in terms of units and dollars.

Apple shipped 12,000 of its slow-selling G4 Cubes in the quarter, down from the already disappointing 29,000 it sold the prior quarter.

Anderson said Apple brought in about one-third of its revenue from its online store.