Earnings Reports for Jan. 17

ByABC News
January 18, 2001, 10:06 AM

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AMD Misses Forecasts

Advanced Micro Devices reported fourth-quarter net income thatnarrowly trailed forecasts. The company joined its larger rival IntelCorp by saying the slowdown in PC sales would hurt first-quarter results.

AMD said net income more than doubledpercent to $177.9 million, or 53 cents a share, from $65.1million, or 21 cents, a year ago. Sales rose 21 percent to to$1.18 billion.

The Sunnyvale, Calif., company was expectedto earn 55 cents a share, the consensus forecast as compiled byFirst Call/Thomson Financial.

In light of weak demand for personal computers and slowingworldwide economies, the chipmaker said it expects that normalseasonal weakness in first-quarter demand for PC processorscoupled with the effects of excess PC inventories indistribution channels will hurt PC processor sales in the firstquarter of 2001.BACK TO TOP

American Airlines' Parent Reports Drop in Profits

The Fort Worth, Texas-based AMR earned $47 million, or 29 centsper share, down from $209 million, or $1.37 per share, a yearearlier.

Excluding one-time items in both quarters, the nation's No. 2airline earned $56 million, or 34 cents a share, down from $87million, or 57 cents per share a year earlier.

Analysts surveyed by First Call/Thomson Financial had expectedAMR to earn 30 cents per share.

Revenue rose 8 percent, to $4.86 billion, from $4.49 billion ayear ago.

"We had a challenging fourth quarter," chairman and chiefexecutive Donald J. Carty said in a statement. "While demand forair travel was strong, severe weather across much of our systemresulted in lost traffic and higher operating costs. And of course,fuel prices remained very high."

AMR said its average price per gallon for jet fuel rose 49percent in the fourth quarter compared to a year earlier; for thefull year, the airline spent 47 percent more on fuel than theprevious period.

Still, Carty said, the company enjoyed strong revenue for all of2000 up 11 percent over 1999 as airplane occupancy rose.

Carty said AMR which announced agreements this month to buythe bulk of Trans World Airlines and parts of US Airways is"cautiously optimistic" about the coming year's results despitesigns of a slowing economy and uncertain fuel prices.

AMR took a $35 million charge on money the company spent to helpemployees buy home computers and a $26 million gain from recoveringstart-up costs in a venture with Canadian Airlines.

For the full year, AMR said its net earnings were $813 million,or $5.03 per share, on revenue of $19.70 billion. In 1999, AMRearned $985 million, or $6.26 per share, on revenue of $17.73billion.BACK TO TOP

Softer Demand Takes Bite Out of Apple

Struggling Apple Computer Corp. posted a first-quarter loss significantly greater than Wall Street had expected.

For the three months ended Dec. 30, the company posted a loss of$247 million, or 73 cents a share.

Wall Street analysts surveyed by First Call/Thomson Financialwere projecting a loss of 65 cents a share.

Taking into account one-time investment gains, Apple's loss was$195 million, or 58 cents a share.

Revenues for the quarter were $1 billion, down 57 percent fromthe $2.34 billion of the year-ago period. The Cupertino-based company has been suffering from sluggishsales, increased competition, and a glut of inventory problemswhich some industry analysts predict will not improve in thecurrent quarter.

Apple has slashed prices of its products in recent weeks andannounced a new lineup of products at MacWorld Expo last week,including faster, more powerful models of its Power Mac G4 and anew titanium PowerBook laptop. It also said its new Mac OS Xoperating system will be bundled with new computers starting inJuly.

That lag time between the announcements and the new OS Xsystems, however, "could potentially stall the market for Appleproducts until that time," said Rob Enderle, an industry analystwith Giga Information Group.

Apple officials, however, said they expect to return toprofitability starting this quarter.

"Consumers like the current OS, too, and I don't think there'llbe a delay," said Fred Anderson, Apple's chief financial officer.Anderson also said Apple was able to successfully cut the channelinventory from 11 weeks to 5½ weeks.

"Our cash position remains very strong at over $4 billion, andwe are planning a return to sustained profitability beginning thisquarter," Anderson said. "We now expect revenues for FY01 to beabout $6 billion."