Apple to Post Lower than Expected Earnings

Apple Thursday is expected to report that its fourth quarter earnings will
be substantially below expectations due to slower than expected sales in the
past month.


The firm said it expects to report revenues between $1.85 and $1.90 billion
and earnings per diluted share, excluding investment gains, between $.30 and
$.33 when actual results are announced on October 18.


The giant had hoped to earn $165 million, but said $110 million was the
realistic figure to date.


Apple’s Chief Financial Officer Fred Anderson said slower-than-expected
sales in September, lower education sales, and sales of its
Power Mac G4 Cube were the three main factors that contributed to the fiscal
shortcomings. Anderson said the letdown has forced Apple to reevaluate its
strategy for the next quarter.


The G4 Cube is one of the smallest fully functional computers available,
measuring about 8 inches square and 10 inches high in an
enclosure of clear plastic. It is touted for its stylish appearance, but
reports have surfaced that it may not be too sturdy.


Calling the news a “speedbump,” Chief Executive Officer Steve Jobs said he
is positive his firm’s future products, including the Mac OS X, will result
in a turnaround.


The company is unveiling updated products, including laptops, iMacs and
high-end PowerMacs for professional users such as
graphic designers.


While Apple executives see this as a good thing, some analysts said it’s
trickier than it looks: The feeling is that the firm have to balance the
inventory of old products with the new.


Hints of a shortfall first appeared last Thursday when shares of Apple fell
7.1 percent, dropping $4.36 to $56.69 in trading of 8.8 million shares.

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