Apple up as Sculley quits: Computer firm 'turning corner' with unexpected profit

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The Independent Online
SHARES of Apple Computer rebounded sharply on Wall Street yesterday, with investors apparently taking the resignation of its chairman, John Sculley, as a sign that its earnings collapse is behind it.

Mr Sculley, who stepped down as chief executive in April, announced his departure from the company a day after Apple reported record sales of dollars 2.14bn for the quarter just ended. Analysts had expected a loss after the computer maker's dollars 200m restructuring in the previous quarter, but it surprised the market with a dollars 2m profit.

The results were well off the fourth quarter a year ago, when it made dollars 97m. But they were widely welcomed as evidence that Apple, which for a long time had been insulated from the price wars ravaging the personal computer industry, was managing to adapt to the new market conditions.

For the year, Apple earned dollars 86m compared with dollars 530m for the 1992 fiscal year.

'We have challenges before us, but we believe we are beginning to turn the corner,' Michael Spindler, chief executive, said.

Investors were encouraged by strong shipments of the Newton Messagepad, the hand-held computer devised by Mr Sculley on which Apple has staked much of its future. Apple, which launched Newton in the US only 10 weeks ago, has already shipped 50,000 of the units.

Mr Sculley will be replaced as chairman by Mike Markulla, 51, a company founder who served as its first board chairman between 1977 and 1981. Mr Sculley, widely touted for a senior post in the Clinton Administration earlier this year, said he was 'ready to head off to new challenges'.

Mr Sculley, who joined Apple 10 years ago at the invitation of its founder, Steve Jobs, 'took Apple from a dollars 600m company to an dollars 8bn company, managing some of the most difficult, exhilarating, and dramatic periods in the world's most exciting industry', Mr Spindler said in a statement yesterday.

Mr Sculley was once a favourite of Wall Street, but his heavy spending on technology research had become increasingly unpopular as Apple became mired in the industry's fierce price competition.