Apple Computer Strives to Return Glow to its Sales
AT last! Apple Computer finally had good news for its stockholders and legions of dedicated customers - the folks that some computer enthusiasts refer to as ``MacFanatics.'' Apple chairman John Sculley announced last week that better-than-expected growth in sales of the Macintosh II computer should boost earnings for the quarter ending March 30. Coming after an 11 percent downturn in first quarter net income, the upbeat assessment should help put a bit of glow back in Apple. During the first quarter, which ended in late December, and which is considered Apple's best quarter given holiday sales, Apple's net income plummeted to $124.8 million, down from $140.5 million the year earlier.
Analysts who follow Apple on a day-to-day basis expect decent but not spectacular growth this year. One typical Wall Street reaction: Carol Muratore, who watches Apple for Morgan Stanley and Company, has a ``hold'' rating on Apple stock, which has been trading in the $36 range on the over-the-counter market. In other words, investors should hold on to Apple stock they now have but not add to their position.
Ms. Muratore now expects Apple to surpass last year's earnings of $3.53 a share. Late last week Muratore upgraded her earnings projection to $3.67, up from the $3.50 that she had been anticipating. Earnings for 1991 look better at around $4.50 a share.
What's happening with Apple, once considered one of the true innovators among US companies? Apple, after all, is the Cupertino, Calif.-based company that virtually delivered the personal computer to Americans - and made it fun to operate in the process. Under Apple's co-founder, Steve Jobs, the company developed a reputation as a brilliant high-tech idea factory. Apple was considered a workplace where creativity was nurtured and the impossible dared. But Mr. Jobs left in 1985, following an unsuccessful struggle for control with Mr. Sculley.
In recent years, aggressive and cash-rich rivals have marched briskly into the personal computer market. Earlier this year, Apple looked like a corporation in deep trouble, as a number of top executives left in a nasty front-office reshuffling that was played out in the business pages of daily newspapers. Apple also announced a number of layoffs for the firm's work force, while deep cost-cutting measures were implemented.