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By:David K. Every
©Copyright 1999

Quarterly Report is in - (4/18/97)
The News looks pretty good, the spin can look pretty bad!

Apple has reported their quarterly earnings (and losses). Some will make a big deal out of $708 million loss. While I wouldn't want Apple to make it a habit, it does not bug me much (I'm a stock holder). $375 million is for buying NeXT (a good move), and $155 million is for restructuring (layoffs) that will get their costs down (also a good move), so the actual operating loss is about $180 million (1/2 of last year at this time). Gross margins were at 19% (as compared to -19% on a year ago's quarter) which is a good trend, and this is traditionally Apple's worst quarter. So things are looking much better than last year at this time.

Apple (Gil Amelio) wrote a Letter to Customers on what the Quarterly report means. I am not sure if this is a pro-active attack on how the media may spin things, a defense of themselves, or just trying to have a different approach to PR. It just seems to state the facts (as Apple sees them) and I agree with what they are saying.

Of course the press has a lot of opinions on the Quarterly Report as well.

Interestingly enough, Wall Street seems to agree with my attitudes on Apple, and despite a $6/share loss, Apple's stock value has actually gone UP! That shows that Apple was (and is) tremendously under-valued. Since the objective is buy-low and sell-high, so now is the right time to buy Apple -- they have their best product line-up in years, are getting their finances in order, are much leaner and meaner, and are at their lowest stock price in years (which means a good value). The threats of a buy-out also imply that Apple is under valued.

There are a lot of wrong articles out there as well. As usual San Fransisco Chronicle, San Jose Merc, NYT are leading the charge of the misinformation cavalry, and other papers are picking up the articles.

Nando Net has a reasonable article except for the comment by a reported analyst that says "Apple is not stressing low-maintenance PCs and simpler management of Networks like Microsoft and Oracle are doing." Duh! That is because Apple is already where MS and Oracle are hoping to get, some day! Its like writing that Mercedes or BMW is not responding to Hyundai's new luxury line!

I made a mistake in first reporting this Article as a spun negative, and I appologize to Nando and Everyone else. (I was working with multiple articles at one time, and confused windows/articles).

American Statesman says that this was Apple's second worst quarter ever. Which requires total ignorance of the facts. Sure Apple has posted their second largest loss, but over half was because they bought another company, and half the rest was because they did the right thing when they trimmed back and laid some people off. Walls Street has responded positively and Apple has their best product line in many years.

New York Times ran a piece "Apple Posts Deficit, Compaq Shows Gains" (now off-line). Like there is any relation between these two stories. They never ran "MS shows loss, while Apple shows gains" when that happened (and it did), nor did they do the same when Packard Bell and IBM were losing money. So this is just Apple Bashing and stupidity. (Big shocker from NYT).

The San Fransisco Chronicle picked up an article from the NYT Syndicate (appropriately named), that is just a bash piece, based loosely on the news. "Apple Loss Adds Bite To Takeover Threat" tries to spin everything in the worst possible way. They blame Amelio for losses taken, ignoring that he was responding to problems that existed in the company before he took the helm! Like the quarter Amelio took the helm, he was responsible for spending $750 million. The article plays up Ellisons' take-over, they state that analysts "expressed concern" -- yet the stock is up, and ComputerWorld (andothers) are running articles that reports "Apple results don't faze analysts". Who seems to know more about computers? ComputerWorld or NYT? (For the record, I don't think the ComputerWorld Article is a great piece, but closer to accurate and much fairer than NYT trash piece). The NYT article tries to blame Apple for a bill going through the state assembly. The bill would allow for tax-relief for unprofitable companies, except that it is not retroactive and couldn't possibly benefit Apple. [If Apple is not profitable by the time the Bill goes through (probably a couple of years), then Apple will be out of business. The reason for the Bill is to help Silicon Valley with its problems in attracting (and keeping) high-technology businesses which have been fleeing the state.]


Created: 09/11/97
Updated: 11/09/02

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