A loss by any other name ..
Throughout the year, MacWEEK editors have drawn straws to decide who will write the Insider column following Apple's release of quarterly results. I'm the lucky winner tapped to cover last week's announcement (see https://www.zdnet.com/macweek/mw_1140/nw_results.html).
This chore is not all bad, however, at least for an optimist like me. I'm actually upbeat about Apple's forthcoming fiscal year.
Perhaps it's the overflow of positive spiritual energy following the Jewish New Year celebration earlier this month, but I see an easier road for Apple over the next year (specifically, for the company's new fiscal year, which began Oct. 1).
Some industry pundits claim that Apple apologists are kidding themselves if they're ready to discount last quarter's $161 million bath, not to mention the $1 billion total from four straight quarters in the red. But I'm facing all the numbers square on.
While Apple's total loss for the year was about $1 billion, its operational losses were "only" $333 million. By the same token, this quarter's "real" loss was $24 million. While that's a lot of dough, it's a smaller loss than we saw in the preceding quarters.
The remainder of the red ink for the current quarter (and two-thirds of the year-end total) resulted from one-time charges racked up to address problems that have been grist for the past year's headlines.
By paying millions to purchase NeXT Software Inc., Apple gained a next-generation OS strategy. Meanwhile, it has significantly restructured manufacturing and operations. Finally, interim CEO Steve Jobs has led an examination of all hardware and software projects, leading to some painful, pricey restructuring moves.
In this quarter alone, one-time charges included the purchase of cloner Power Computing Corp.'s license and an additional reserve kitty to cover any more restructuring costs.
That's the bad news. In contrast with 1997's stormy weather, 1998 looks far calmer on the operational and financial fronts. Most of Apple's heavy restructuring is behind it, and losses for the past several quarters have shrunk. (As usual, Apple Chief Financial Officer Fred Anderson is playing it safe and won't predict when the company will hit black ink.)
Starting the fiscal year with a bang, Apple is expected to unleash a storm of new Mac products. The first blast, sources said, will be the Power Mac G3, the first of Apple's next-generation machines based on the third-generation PowerPC 750 processor. Due next month, these peppy, midrange systems could provide a much-needed kick start both to the Mac platform and to Apple's money-making machine.
The Talmud says: "In business, everything depends on aid from heaven." For Apple, however, it may be better to rely on strong execution and availability, especially for the new G3 models.
David Morgenstern, MacWEEK executive editor/news, welcomes feedback at david_morgenstern@macweek.com.