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Computermakers have rough day // APPLE

Apple Computer Inc. reported Wednesday its worst quarterly performance _ a $740-million loss on sinking sales and profit margins _ and said it will lay off 1,500 more employees over the next year.

The company had previously warned about the loss for its second fiscal quarter, saying it would have to pay for the declining value of unsold computers and severance for 1,300 job cuts announced in January.

But its troubles worsened, as the quarterly report made clear.

Apple's sales fell a staggering 18 percent from January to March while the overall personal-computer industry continued to grow, though at a slower rate than last year. Gross profit margin fell to 9 percent, below the 15 percent margin it had in the last three months of 1995 and far from its typical high 20 percent rate.

Uncertainty about Apple's future, driven by takeover rumors and a change in senior management, caused individuals and businesses to hold back on purchases for several weeks in January and February.

Apple's loss for the three months ended March 29 amounted to $5.99 a share, compared with a profit of $73-million, or 59 cents a share, a year ago.

Revenue was $2.2-billion, down from $2.7-billion. Apple's previous worst quarter was April-June 1993, when the company lost $188-million.

Gil Amelio, hired as chairman and chief executive officer in February to turn the company around, listed four major problems to correct.

He said Apple has too many unprofitable products, has focused too much on product features rather than customer needs, has too many different products and lacks sufficient focus on where the computer industry is headed.

"That's a pretty sobering report card, if you will," Amelio told reporters. "(But) I feel we've got some real positives we can build on."

He plans to detail a recovery plan next month and said the company should return to profitability within a year.

Apple released the figures after financial markets closed. Its stock finished down 62{ cents to $25.25 on the Nasdaq Stock Market.

More than half the $740-million loss _ $388-million _ went to write down the value of Apple's inventory. Its stock of machines began rising after it overestimated demand for low-priced and low-powered computers last year. It got out of hand while customers waited out its turmoil this quarter.

An additional $130-million went for restructuring, including 1,300 layoffs that were announced in January. With the 1,500 additional cuts, Apple's work force will drop from 14,500 to 11,700 in 15 months.

"The real issues are: How bad is it? and How much time do they have to try to make things right?" said Robert Herwick, president of Herwick Capital Management in San Francisco.

He noted Apple's domestic revenues fell 27 percent. Its cash reserve was just $592-million, down from $952-million six months ago. If it declines at the current rate, Apple may have to look for outside financing, something that may be hard to find until the company shows signs of a turnaround, he said.

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