Apple to Restate Earnings

Elena
04 Aug, 2006
New York City

The last four years mark one of the most prosperous periods in the 30-year history of the company, largely due to the growing sales of its iPod player. The company''s market value has grown by $55 billion since September 2002, with its stock price rising nearly 10-fold. The company also said it will delay filing its report for the latest quarter with the SEC. In aftermarket trading shares of Apple fell 6.6% to $65.

[R]8:00AM Apple Computer warned of profits revision.[/R]
Apple Computer Inc. ((AAPL)) said it discovered more evidence of irregularities related to stock-option grants and warned that it may have to revise profits back to September 2002. In June, Apple said an internal investigation had found irregularities related to issuance of stock-option grants between 1997 and 2001. At that time, Apple said one of the grants in question was given to CEO Steve Jobs, but he voluntarily canceled them in 2003 before cashing them in.

The last four years mark one of the most prosperous periods in the 30-year history of the company, largely due to the steadily rising sales of its ubiquitous iPod. The company's market value has increased by about $55 billion since September 2002, with its stock price rising nearly 10-fold.

The company also said it will delay filing its report for the latest quarter with the SEC. In addition, Apple said it also will likely need to restate results to record non-cash charges for compensation expense relating to past stock-option grants. For the third fiscal quarter Apple reported a 47.5% profit jump, boosted by higher iPod sales and Macintosh personal computers.

The tech giant with a market capitalization of more than $59 billion, is one of the many companies in the technology sector, that have recently disclosed potential accounting problems caused by stock option improprieties. In aftermarket trading shares of Apple fell 6.6% to $65 on the electronic INET exchange.


[R]7:30AM Asia ended mixed on rate-hikes and concerns over FOMC meeting.[/R]
Asian markets ended mixed on Friday. Japan''s Nikkei 225 Average gained 0.19% to close at 15,499.18. Mitsubishi UFJ Financial Group gained, rising 1.94% and Sumitomo Realty & Development, also advanced 2.01%. Among electronics issues, Matsushita Electric Industrial climbed 0.21%. Pharmaceuticals also advanced, with Takeda Pharmaceutical rising 1.73%. Internet business company Softbank gained 2.08%.

South Korean shares also closed higher. The Korea Composite Stock Price Index, or Kospi, closed up 1% at 1304.51. Bank and brokerage stocks contributed to the main index''s increase. Samsung Securities climbed 1.2% and Daewoo Securities jumped 5.1%. Kookmin Bank rose 1.7%.

Hong Kong shares finished lower with the Hang Seng Index falling 0.94% to 16887.80. Computer maker Lenovo Group, helped by a better-than-expected first-quarter result, jumped 3.6%, being the only gainer among 33 index constituent stocks. Most stocks fell on uncertainty over the direction of U.S. interest rates. Taiwan shares also fell with technology stocks being sold after they gained in the previous two sessions. The Weighted Price Index of the Taiwan Stock Exchange shed 0.3% to 6442.61.


[R]6:30AM European markets bounce back, regardless of ECB rate-hike.[/R]
European markets were higher on Friday morning. The German DAX Xetra 30 index rose 0.5% at 5,667, the French CAC 40 index added 0.4% at 5,001 and the U.K. FTSE 100 index rose 0.2% at 5,847. Allianz was so impressed with its second-quarter performance, that it was prompted to lift its full-year targets. Its shares gained 2.4%. Swiss reinsurance company Swiss Re moved up 0.3% lower after reporting a 16% first-half profit rise and holding its outlook.

Electricite de France surged 3.7% after getting permission to raise French electricity prices by 1.7%, starting in mid-August, and reporting second-quarter comparable revenue growth of 10.9%. Anglo American rose 3.4% after announcing it would buy back $4 billion in shares, lifting its dividend by 18% and reporting a 52% increase in adjusted operating profit. Philips Electronics gained 2.1% following its agreement to sell 80% of its semiconductor unit for 8.3 billion euros to a consortium of private-equity investors led by Kohlberg Kravis Roberts & Co.

Crude oil rose above $77 a barrel in London on reports that a German and three Filipino oil workers were kidnapped by suspected militants, raising concern about further supply disruptions from Africa''s largest oil producer. Brent crude oil for September settlement rose as much as 61 cents, or 0.8 percent, to $77.17 a barrel on the ICE Futures exchange in London. The contract traded at $77 at 11:20 a.m. in London. Crude oil for September delivery was up 13 cents to $75.59 a barrel on the New York Mercantile Exchange.

Gold bounced around on Friday after failing to break above this week''s two-week high, capped by selling pressure ahead of crucial U.S. jobs data and next week''s U.S. Federal Reserve meeting. Spot gold hit a high of $647.00 an ounce before dipping to $646.20/647.70 an ounce, down slightly from $646.50/648.00 late in New York on Thursday.

The euro was a little lower against the U.S. dollar Friday, giving up modest gains that it made after the ECB hiked interest rates. The euro bought $1.2792 in early European trading, down from $1.2805 in New York late Thursday. The British pound also retreated from gains it made after the Bank of England raised rates, slipping to $1.8862 from $1.8883. The dollar rose to 115.19 Japanese yen from 114.91 yen.