Apple profits soar despite setback on currency hedges in here
Saturday 22 April 1995
The company exports 54 per cent of its production and hedges in the futures markets against changes the currency values of anticipated income.
Recent falls in the value of the dollar proved unexpected and the company estimates losses of $50m on outstanding forward exchange contracts and currency options in the three months ending March 31.
The currency losses did not dull a larger-than-expected increase in profits. Profits in the six months to March 31, 1995, were $261m, including a $17m restructuring charge. These profits are more than five times last year's equivalent figure.
The increase was largely achieved through a deliberate attempt to concentrate on increasing sales, which rose from $4.5bn in the first half of 1994 to $5.5bn in 1995.
The key product behind this increase was the Power Mac. This is a new generation personal computer, developed jointly with IBM and Motorola, the semiconductor manufacturer.
The new machines use technology known as reduced instruction set computing (Risc), previously seen only on high-performance engineering workstations .
Overall, the company expects the falling value of the dollar will help its exports drive and compensate the company for losses in the currency market. Overseas sales increased 34 per cent in the second quarter compared with second quarter 1994.
Michael Spindler, Apple's president and chief executive, said: "During the period we saw broad-based growth in our business, throughout our product line, and across geographies, demonstrating our ability to effectively respond to customers' needs and market demands around the world."
In recent years Apple suffered in an increasingly hostile computer market. As its share of the personal computer market dwindled to below 9 per cent, the shares have under-performed, sliding from a five-year high of $71.50 in 1991 to a low of $23 in October 1993.
Since then Apple has announced a large reorganisation. As part of the change, Ian Diery, executive vice-president and manager of the PC hardware division, announced that he would step down.
"There's been an internal battle between those who want to focus on market share and those who want to preserve profitability," says Bruce Lupatkin, an analyst at Hambrecht & Quist, the New York stockbroker. "The market share camp won."
Apple's new strategy includes licensing its famed user-friendly operating system to other manufacturers for the first time. This is an attempt to broaden its market penetration in specialist markets such as multimedia. Research and development has also been linked more closely to product development and marketing divisions.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
- 5 Narendra Modi: Indian Prime Minister wears suit with pinstripes that spell his name to meet Barack Obama
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Pornhub star Mia Khalifa receives death threats after being ranked the site's top adult actress
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...