Apple predicts earnings surge

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The Independent Online
APPLE Computer, which is reported to be near an agreement that would make its products compatible with other personal computers, had more good news for investors yesterday when it predicted a better-than-expected fourth quarter.

Apple said it would report earnings and sales next Monday well above the estimates of Wall Street's analysts, who were forecasting profits of between 50 and 80 cents a share. The company said it would make 'slightly above' 90 cents a share on revenues of dollars 2.5bn, and said expenses would be lower, and profit margins higher, than expected.

The announcement sent Apple's shares soaring again yesterday, gaining more than dollars 2 to dollars 41. Apple has been on a roll for the past week, first after rumours it might merge with Motorola or AT&T, and later on word that it planned to end its technical isolation from the rest of the industry.

Both Apple and its longtime arch-rival, International Business Machines, said again yesterday that the two companies were close to agreeing on a common standard that would allow their computers to run software written for either of the three leading operating systems, Apple's Macintosh, IBM's OS/2 or Microsoft's Windows.

The accord would confirm a big realignment of the industry, pitting the former adversaries against the acknowledged victors of the PC revolution, Microsoft and Intel, the leading manufacturer of computer semiconductors. Since 1991, IBM and Apple have teamed up in a number of joint ventures, most significantly with Motorola to build the PowerPC microprocessor, a direct challenge to Intel's best- selling Pentium chip.

But a common operating system, or 'platform', is essential if the two companies are to reassert themselves as leaders. Macintosh and OS/2 have both suffered from the consolidation of the software business around Windows, which now accounts for 85 per cent of computers.