NEW YORK - Apple Computer Inc.'s stock plunged as much as 21 percent Monday after the company predicted an operating loss of up to $150 million in the latest quarter, hurt by slow computer sales.
It was investors' first chance to react to Apple's disclosure, which cast fresh doubts on the company's ability to rebound from recent financial troubles. Apple issued the prediction late Friday after the close of stock markets, blaming weak demand for its Performa computers and shortages of new PowerBook portables.
Apple stock closed sharply lower after recovering somewhat. It was down 17.8 percent, or $3.87« a share to $17.87« in heavy trading on the Nasdaq Stock Market.
The dismal first-quarter forecast comes as Apple struggles to restore market share and consumer confidence following protracted delays in updating its aging Macintosh operating system.
Apple is pegging its recovery on its impending $400 million acquisition of Next Software Inc., founded by former Apple chairman Steve Jobs. It plans to use the Next software to help update its Mac operating system.
The company also hopes to save money on software research and development through the acquisition.
Chairman Gil Amelio, who took charge of Apple 11 months ago, on Friday said the company needs to cut costs further following a major reorganization last year.
Mr. Amelio said the cost cuts will enable Apple to break even at revenues of about $8 billion. That is lower than the company's $9.83 billion revenue for the fiscal year that ended in September. That figure, however, was 11 percent lower than the year before.
The company predicted that revenue will drop 10 percent in the three-month period ended Dec. 27, which includes the important holiday selling season, from the prior quarter's $2.3 billion.
Apple cut the price of its Performas up to 30 percent last fall in an attempt to boost sales and market share. But consumers have been deferring personal computer purchases and are apparently still cautious about buying from Apple because of its troubles, analysts said.
Apple said its operating loss for the first quarter is expected to come in at between $100 million and $150 million.
Apple, the nation's third-largest maker of personal computers will report its first quarter results on Jan. 15.
Apple pioneered the commercial personal computer in the 1970s and made it easy to use in the 1980s with the Macintosh. In recent years, however, it has lost ground as PCs using Microsoft Corp.'s Windows operating software eroded the Mac's traditional ease-of-use advantage.