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Q2 profits, revenues, margins up, inventory down

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Update Apple yesterday added a sixth quarter to its run of profitable three-month periods. For the second quarter of fiscal 1999, ended 27 March, the company made $135 million on revenues of $1.53 billion. For the same period last year, Apple recorded profits of $55 million and revenues of $1.40 billion, representing year-on-year growth of 245 per cent nine per cent, respectively. Half of the quarter's revenue was made outside North America. That said, only $93 million was made selling Macs -- Apple recovered $50 million selling two million of its ARM Holdings stock, offset by an $8 million restructuring charge. And the Q2 figures were down on the previous quarter's $123 million, again before a sale of ARM shares, then of $29 million. Revenue for last quarter was $1.7 billion, though as Q1 covered the Christmas period, a drop was to be expected. Interim CEO Steve Jobs hailed the strong sales of Apple's iMac and Power Mac G3 machines, which together saw unit sales growth of 27 per cent, well up on the industry average of 14 per cent, at least according to market researcher IDC. Averages, however, hide the real winners and losers, and Apple still has some way to match the huge, 50 per cent growth experienced by the likes of Dell. Jobs also pointed to Apple's inventory management, claiming the company ended the quarter with just one days' worth of inventory, "beating Dell for the third quarter in a row". This is very good news for Apple, but perhaps little consolation for resellers still stuck with old iMacs superseded by Apple's aggressive upgrade programme. The company's gross margins averaged 26.3 per cent, up from 24.8 per cent last year. According to Apple CFO Fred Anderson, speaking after the official announcement of the company's Q2 figures, the Apple saw significant international growth, with sales increasing 41 per cent in Asia, thanks to the continued popularity of the iMac in Japan, and 26 per cent in Europe. Sales in the Americas grew only 19 per cent. During the quarter, said Anderson, Apple shipped over 827,000 machines, 48 per cent of which were the new blue'n'white Power Mac G3s, or almost 400,000 units. Around 350,000 iMacs shipped; PowerBooks accounted for the remainder. ®

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