Apple Computer Posts a Loss of $17.2 Million
By Andrew Pollack
Special to the New York Times
San Francisco -- July 18, 1985 -- Apple Computer Inc. said today that it lost $17.2 million in its third fiscal quarter, the first quarterly loss for the personal computer pioneer since it incorporated in 1977.
The loss resulted from a one-time charge against earnings of $40.3 million, owing to the recently announced consolidation of the company that includes the closing of three of the company's six factories and the dismissal of 1,200 of its 5,800 employees.
Apple said that its pretax profits from operations for the quarter, which ended June 28, were $3.5 million. In the third fiscal quarter a year ago, Apple had pretax operating profit of $28.3 million and net income of $18.3 million. Revenue for the quarter dropped 11.2 percent, to $374.9 million, from $422.1 a year earlier.
Apple has been suffering from a general slowdown in the personal computer business, as well as from specific problems with its own products, and internal turmoil that led to the reorganization in late May that relieved Steven P. Jobs, the chairman, of his day-to-day operating responsibilities.
Analysts were hesitant to make predictions about the fourth quarter, but said Apple could make a slight profit because it would begin to realize cost savings from the plant closings and layoffs. Apple's stock closed today at a bid price of 17 1/4 in the over-the-counter market, down 1/4.
Apple's president, John Sculley, said that the recent moves by Apple had ''swiftly lowered the break-even point for the company.''
Michele Preston, computer industry analyst at L. F. Rothschild, Unterberg, Towbin, estimated that Apple could now break even with $350 million to $370 million in quarterly revenues, compared with $425 million required at the beginning of the year.
Despite the quarterly loss, Apple's balance sheet is strong; its cash reserves grew to $254.6 million in the quarter. Inventories also dropped.
Apple, however, still faces significant challenges, The latest will come next week, when Commodore International Ltd. is expected to introduce its Amiga computer, which boasts very powerful graphic capabilities and could pose a challenge to Apple's two main products, the Macintosh and Apple II.
Copyright 1985 The New York Times Company