Apple profits tumble in Q3

Apple Computer Inc. on Tuesday reported third-quarter revenue that was in line with its lowered estimates, but saw its profits slashed from a year ago as the industry continues to reel from a decline in personal computer spending.

For its fiscal third quarter ended June 29, Apple reported a net profit of US$32 million, or $0.09 per diluted share, the company said in a statement. That compares to a net profit of $61 million, or $0.17 per diluted share, in the same quarter last year.

Revenue totaled $1.43 billion, down 3 percent from $1.47 billion in the year-ago quarter, the company said.

A consensus of analyst estimates pegged Apple to earn $0.09 per share, according to Thomson Financial/First Call, a research firm that tracks such data. Revenue was expected to come in at about $1.42 billion, according to the analyst consensus.

Sales of Apple's hardware products slipped slightly from the same quarter last year. It shipped 808,000 Macintosh units, down 2 percent from the same quarter a year ago. International sales accounted for 42 percent of Apple revenue during the quarter, the company said.

Financial analyst firm Salomon Smith Barney Holdings Inc. wrote in a research note Tuesday that its "checks suggest that shipments of most product lines met or exceeded revised expectations."

On June 18, the Cupertino, California, computer and software maker lowered its guidance for the third quarter, blaming what it called "soft demand in the consumer and creative markets." It projected revenue of $1.4 billion to $1.45 billion, down from its previous forecast of $1.6 billion, and said earnings per share would come in at $0.08 to $0.10, down from its earlier prediction of $0.11.

Revenue was also slimmer than expected in Europe and Japan and contributed to the lowered guidance, Apple said at the time.

On Tuesday, Apple said it expects fiscal fourth quarter revenue to be about even with the third quarter figures. The company expects to show a "slight profit," after accounting for nonrecurring charges, Fred Anderson, Apple's chief financial officer, said in the statement.

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Matt Berger

PC World
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