Wary Consumers Give Apple a Record $120-Million Loss

Apple Computer Inc. reported a $120-million loss for its fiscal first quarter ended Dec. 30, the worst in the company’s 20-year history, as consumers shunned the troubled personal computer maker.

Due to a slump in sales of its Performa line of home computers, Apple is not expected to break even until its fourth quarter ending Sept. 26.

Sales for the first quarter, typically the strongest for PC makers, fell 32%, to $2.1 billion from $3.1 billion posted during same period last year. The loss, which Apple warned of earlier this month, compares with a $69-million shortfall for the corresponding quarter of 1995.

Apple shares fell 62.5 cents to close at $17.25 on Nasdaq.

Apple Chairman and Chief Executive Gilbert Amelio had predicted last year that Apple, through several dramatic cutbacks including layoffs, would be able to turn a profit by spring.

But sales of Performas, which account for a third of Apple’s revenue, were particularly dismal during the holidays, down 35% from company forecasts.

Computer sales to businesses, never a strong market for Apple, declined 15% from last quarter.

“We certainly have a problem with consumer confidence,” said Apple Chief Operating Officer Marco Landi. “There are concerns about what is going to happen to Apple and the Macintosh.

“Apple is still a viable company,” he said, noting that the company has $1.8 billion in cash and short-term investments.

Apple will cut operating expenses by $400 million over the upcoming two quarters, a reduction of about 25%, according to Apple Chief Financial Officer Fred Anderson.

He declined to reveal details of Apple’s restructuring plan, but industry analysts speculate there will be a new round of job cuts in upcoming months.