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The Honolulu Advertiser
Posted on: Thursday, January 16, 2003

Apple's earnings sour, Yahoo's sweet

Los Angeles Times

Two giants in the tech world issued divergent earnings reports yesterday.

Apple Computer Inc. reported a loss of $8 million for the last three months of 2002, the first time Apple has recorded two consecutive quarterly losses since founder Steve Jobs returned to the company's executive offices in 1997.

Yahoo Inc.'s search for a solid turnaround was rewarded yesterday when it posted better-than-expected earnings of $46.2 million in the fourth quarter, its third consecutive moneymaking quarter.

Apple's back-to-back losses underscore the continuing struggle the company is facing against the dominance of personal computers running rival Microsoft Corp.'s Windows operating system. The loss for the first quarter of Apple's 2003 fiscal year, which amounted to 2 cents per share, was in contrast to a profit of $38 million, or 11 cents a share, in the same period a year earlier.

But Cupertino, Calif.-based Apple said it expected to shake off the traditional slowdown in the January to March quarter with flat revenues and a slight profit.

Apple said revenue was $1.47 billion for the three months ending Dec. 28, up 7 percent from the year-earlier quarter. Excluding one-time charges of $17 million for after-tax restructuring and $2 million for an after-tax accounting transition adjustment, Apple would have recorded a net profit of $11 million, or 3 cents per share. That was in line with Wall Street expectations.

Apple shares dipped 18 cents to close at $14.43 in regular NASDAQ trading yesterday before the results were announced. They dropped as low as $13.96 in after-hours trading before recovering to $14.32.

Yahoo's 8-cents-a-share results compare with a loss of $8.7 million in the year-earlier quarter, and were 2 cents higher than Wall Street's expectations.

The Sunnyvale, Calif.-based company's report also came amid a 51 percent increase in revenue, to $285.8 million. In addition, the operator of the popular search engine revised upward its revenue and earnings estimates for 2003.

"The turnaround is ahead of schedule," said analyst Jordan Rohan of SoundView Technology Group.