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 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 3 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
University of Cambridge: Remains of 1,300 scholars are found under building
April Fools' Day 2015: The best hoax news stories from around the internet
April Fools' Day 2015 live: The best pranks and fake stories from around the world
Turkey power cut: Prime Minister says nationwide blackout could be caused by terrorists
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...