Feeds

Apple a ‘cash machine’ – CFO

Inventory shrinking, cash-pile growing

  • alert
  • submit to reddit

Apple is sticking to its previous forecasts of a small increase in Q4 sales and shipments over Q3, accompanied by a slight increase in earnings, CFO Fred Anderson tacitly said yesterday. The company's fourth quarter end on 30 September.

Actually, what he said was: "We give guidance once a quarter and if you don't hear from us, that's good news." No news is good news, in other words. Not that that stopped Anderson from bullishly expounding on the company's financial position.

Three key areas will define Apple's economics over the coming months: inventory, cash and Mac OS X. The company's Unix-based operating system will be a "huge growth driver next year", Anderson predicted, as the arrival of native applications lead users to upgrade their hardware for the OS or purchase the shrink-wrapped package.

Given the current state of the PC market, Apple can't rely to heavily on high levels of growth in hardware sales. Instead, it has focused on cost reductions, and keeping inventory down. Anderson claimed Apple currently has less than four week' inventory in its channel, which will be cut to just two days' worth - valued at $19 million - by the end of the quarter. That's bang on target, Anderson said.

The company's cash-pile continues to grow, meanwhile, by about $200 million this financial year, which ends on 30 September. It already has around $4.2 billion in the bank. "Apple, quite frankly, has been a cash machine," said Anderson. Around $300 million cash will be used to buy Apple stock, he added.

Anderson restated the company's claim that its retail operation will break even during the Christmas quarter - the first of the company's 2002 fiscal year - and make a "slight profit" by the end of 2002.

During Q3, Apple made a profit of $61 million (17 cents a share) on sales of $1.475 billion, down 19 per cent on Q3 2000. ®

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.