Apple Losses 73 Cents a Share in 1Q

     SAN JOSE, Calif. (AP) -- Struggling Apple Computer Inc. posted a first-quarter loss greater than what Wall Street was expecting, but promised a return to profitability next quarter.
      For the three months ended Dec. 30, the company lost $247 million, or 73 cents a share, the company said Wednesday. In the year-ago quarter, Apple earned $183 million, or 51 cents per share.
      Wall Street analysts surveyed by First Call/Thomson Financial were projecting a loss of 65 cents a share.
     Taking into account one-time investment gains as well as some accounting adjustments, Apple's loss was $195 million, or 58 cents a share, the company said.
      Revenues for the quarter were $1 billion, down 57 percent from the $2.34 billion of the year-ago period.
     Shares of Apple finished regular trading down 31 cents to $16.81 on the Nasdaq Stock Market. After the earnings report, shares crept up to $17.56 in after-hours trading.
     The Cupertino-based company has been suffering from sluggish sales, increased competition, and a glut of inventory -- problems that some industry analysts predict will not improve in the current quarter despite an optimistic outlook by Apple officials.
      Apple has slashed prices of its products in recent weeks and announced a new lineup of products at MacWorld Expo last week, including faster, more powerful models of its Power Mac G4 and a new titanium PowerBook laptop. It also said its new Mac OS X operating system will be bundled with new computers starting in July.
     That lag time between the announcements and the new OS X systems, however, ``could potentially stall the market for Apple products until that time,'' said Rob Enderle, an industry analyst with Giga Information Group.
      Apple officials, however, said they expect to return to profitability starting this quarter.
``Consumers like the current OS, too, and I don't think there'll be a delay,'' said Fred Anderson, Apple's chief financial officer.
      ``Our cash position remains very strong at over $4 billion, and we are planning a return to sustained profitability beginning this quarter,'' Anderson said.
     In a conference call with analysts, Anderson said bookings for the new products -- the titanium PowerBook due out at the end of January, and the new Power Macs, due out in February -- ``are very strong.''
      He also said the company's inventory backup had been reduced from 11 weeks to 5{ weeks.
     But because of poor PC sales industrywide, Apple was cautiously optimistic about its outlook. The company is projecting revenue of $6 billion to $6.5 billion for the current fiscal year, well down from nearly $8 billion last fiscal year.
      Apple's staggering quarterly loss -- its first non-profitable quarter in the three years since chief executive officer Steve Jobs returned to lead the company -- was not a surprise to Wall Street. The company that revolutionized personal computing had warned in December that its loss would range between $225 million and $250 million.
    ``The question for Apple is can they return to sustainable profitability,'' said Bear Stearns analyst Andrew Neff. ``That's what we want to know.''
      The PC slump has heightened the debate over Apple's future. The apparent saturation in the market for personal computers has been a more acute challenge for Apple than for other computer makers because it relies mostly on PC sales for its revenue, and its products are higher priced.
     ``The new products, the laptop, could help them out in the next quarter or two, but in the long run, I think they'll have to diversify their product offerings,'' said Robyn Bergeron, an analyst with Cahners In-Stat Group.
      Adding to its woes, Apple slipped to No. 2 last year behind Dell Computer Corp. in sales to schools.
      Anderson noted that Apple's unit sales in the education sector for December climbed to match the unit sales of the year-ago period -- a sign he said shows the education division's new management is making inroads.
     Still, David Bailey, an analyst with Gerard Klauer Mattison, was not convinced.
      ``I'm still skeptical of the their ability to regain their momentum in the education sector in the near term,'' Bailey said. ``And if they want to return to revenue growth, they need to expand beyond their installed base and to do that, they need to enhance the retail channel and they need a sales force that can articulate the benefits of the Mac versus Windows operating system.''