Apple's revised forecast calls for company to lose money in 2002
By Greg Chang
Bloomberg News Service
CUPERTINO, Calif. — Apple Computer Inc., maker of the iMac personal computer, said its retail stores will have a loss in fiscal 2002, a setback to the company's plan to boost sales and profit by distancing itself from rivals.
Bloomberg News Service
Apple opened 27 stores this year, two more than originally planned, the company said in a regulatory filing. The PC maker said earlier that its retail operations would have a loss for the first quarter ending next week and become profitable for the year ending in September 2002.
Apple, makers of the iMac, opened 27 stores in 2001. Each of the stores would need annual sales of $10 million for the company to break even in 2002, said Brett Miller, a stock analyst with A.G. Edwards.
The U.S. economic recession and the Sept. 11 attacks are crimping PC sales, Apple said in the filing.
The company opened its first retail store in May to attract new customers and distinguish its PCs from those running on Microsoft Corp. software, made by companies including Gateway Inc., Hewlett-Packard Co. and Compaq Computer Corp.
The company made the original profit forecast in May, when there was "a very different outlook" for the economy and the PC market, said Brett Miller, an analyst with A.G. Edwards, who rates Apple stock "buy" and doesn't own the shares.
Apple in August forecast that it would spend $85 million to open the stores by year-end. Miller estimates that the company needs annual sales of $10 million at each store to break even. The company hasn't provided details on the performance of its retail operations.
Apple officials couldn't immediately be reached to comment. The company's shares rose 13 cents to $21.49 and have gained 44 percent this year.
In the filing, Apple also said Chief Executive Officer Steve Jobs was paid $1 in annual salary, as he has been for the past two years. He was granted no new options to buy Apple shares.
During the year, Jobs also received a $43.5 million private jet and $40.5 million to cover taxes for the plane, a special bonus that was announced in January 2000. He received options for 20 million shares in 1999.
The options, which can be converted into stock at $16.81 a share, would be worth $26.8 million if the shares rise 10 percent annually for 10 years, the filing said.
