Apple back in profit after three-year gap

Manufacturer fulfils demand for iMacs, shifting 834,000 boxes.

Apple has recorded its first fully profitable year since 1995 as it reaps the benefits of good sales for its consumer machine, iMac.

The Macintosh manufacturer reported profit of $106 million and sales of $1.56 billion for the fourth quarter ended 25 September. This compared with a loss of $161 million for the same period in 1997, although sales were slightly down from $161 billion.

Results for the full year showed that Apple earned $309 million - or $2.10 per share - compared with a loss of more than $1 billion the previous year. But total revenue fell 17 per cent from $7.1 billion to $5.9 billion.

The manufacturer blamed the drop in revenue on falling prices and costs associated with the closure of its Newton operation earlier in the year.

Apple shipped 278,000 iMacs during its first six weeks on the market.

In total, it sold 834,000 units during the fourth quarter.

Fred Anderson, financial officer at Apple, said: 'This is the first time since December 1993 that we've had growth ahead of industry rates. iMac was the obvious driver for this, but we also had growth in our professional desktop and powerbook lines.'

He added: 'We expect revenue and unit growth to continue in December due to iMac. Next year, our aim is to grow revenues above the industry rate.'

Apple's financial report was accompanied by details of the availability of the latest version of its operating system, the Mac OS 8.5.

Apple revealed that the upgrade contained a feature called Sherlock, an online search device which simultaneously accesses multiple internet search engines.

Steve Jobs, long-term interim chief executive at Apple, said more than 40 per cent of iMac buyers were first time Apple customers.

'It's a great finish to a great year. A tremendous downward trend has now bottomed out,' he added.