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Apple Posts $161 Million Loss

October 15, 1997

Apple Computer Inc. on Wednesday reported it lost a worse-than-expected $161 million on a 7 percent drop in computer sales last quarter and disclosed a fresh round of cost cuts to try to revive its dim fortunes.

Apple said the loss in its fourth fiscal quarter came to $1.26 per share, compared with profits of $25 million, or 20 cents per share, in the year-ago quarter.

Revenues fell to $1.61 billion from $2.32 billion.

Not counting restructuring and other charges, Apple would have lost 19 cents per share, which was slightly worse than the 14 cents per share forecast by analysts surveyed by First Call.

Fred Anderson, Apple’s chief financial officer, said in a telephone interview that Apple was slowly stabilizing its revenue declines and cut operating expenses to $353 million in the fourth quarter. He pointed to $500 million in quarterly computer sales to schools, one of Apple’s core markets.

But he declined to be specific about the latest round of cuts at Apple, which are expected to include additional layoffs following sharp staff reductions this past year.

He also said Apple continues to search for a new chief executive officer, despite suggestions from co-founder Steve Jobs that he may be considering making the position he temporarily holds more permanent.

The earnings results were released after the close of financial markets.

Jobs, Apple’s charismatic co-founder, has guided Apple through a series of dramatic changes since he took charge of the company after a management shakeup in July. The company replaced its board of directors, decided not to spin off its Newton hand-held division, severely restricted cloning of the Macintosh and ended its long and bitter feud with Microsoft Corp.

Apple also has sought closer relationships with developers, particularly those producing publishing software for the Mac. Along with education, publishing is one of the markets where Apple remains strong, despite losses elsewhere.

Still, Apple’s overall market share has shrunk alarmingly.

Apple, once a PC pioneer, has steadily lost ground to rival machines that run on Intel Corp. chips using Microsoft’s Windows operating software. Windows is seen by many to be almost as easy to use as Apple’s Macintosh.

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