Hefty Loss Compounds Apple Computer’s Woes

Apple Computer Inc. made the bad news official on Wednesday, reporting a loss of $120 million in the key October-December quarter as weak consumer demand depressed sales and forced price cuts.

Apple, which warned of the red ink earlier this month, said the loss for its fiscal first quarter amounted to 96 cents a share, deeper than analysts expected. The company lost $69 million, or 56 cents a share, in the same period at the end of 1995.

Revenue fell 32 percent to $2.1 billion from $3.1 billion.

Apple, the nation’s third-largest computer maker, blamed the loss on weak demand for its Performa consumer line, the subsequent need to cut prices, and shortages of its PowerBook portables.

The company, which for the past year has been trying to reinvent itself, also repeated earlier statements that it would undergo a further restructuring. Apple said it did not yet know details but said job cuts could be a possibility.

Apple now hopes to return to profitability by its fourth fiscal quarter, which ends in September. It previously hoped to make money again this spring.

The loss, while expected, prompted Standard & Poors to lower its credit ratings for Apple, already in speculative territory. S&P cited the challenges facing the company as it tries to cut costs, boost sales and recover market share. The lower the rating, the greater the risk to lenders and the higher the borrowing costs for a company.

While disappointed by the results, Apple chairman Gil Amelio was optimistic that his long-term plan to revitalize Apple was on track.

“Despite the recent quarter’s loss, we are confident that our three-year transformation plan is sound and we remain focused on executing that plan,” he said.