December 1991

BUSINESS NEWS

NeXT forecasts strong growth, despite Q3 softness

by Clair Whitmer

Redwood City, CA: NeXT Computer is forecasting at least $140 - $150 million in sales for the year, despite a soft third quarter, a figure that will more than quadruple their reported 1990 sales of $29 million.

"We believe that we will beat $140 million. We feel we're doing very, very well," said NeXT CEO Steve Jobs.

At Unix Expo in New York last month, Jobs said he anticipates sales of $60 million for the fourth quarter, compared with $71 million for the first half of the year. The company will not disclose sales for the third quarter, which closed in September. But if the $60 million figure is accurate, then the company experienced a drastic decline in sales in the third quarter.

Analysts expressed skepticism about NeXT's projected quarterly figures.

"There's no way they're going to go from $15 million to $60 million in a quarter," said analyst David Card at International Data Corporation West of Mountain View, California. One view is that NeXT booked third-quarter deliveries in the second quarter to beef up its second-quarter results, which it had all along planned to make public.

Card pointed out that Sun Microsystems also reported a disappointing third quarter in terms of unit sales, which company executives attributed to decreased sales in the commercial market.

A NeXT spokesperson later clarified Jobs's public statement, saying $60 million was optimistic for the fourth quarter, while $140 - $150 million for the year is a low-ball estimate. This would bump up the range of possible third-quarter sales.

NeXT Director of Marketing Mike Slade said that fourth quarter looks "a lot stronger" than third quarter, conceding that the third quarter was "flat, even a little soft."

"I think you will see that the industry as a whole had a disappointing third quarter," said Jobs, while adding that any arithmetic based on the $60 million figure may be misleading.

Speculation about third-quarter results aside, if the company tops $140 for the fourth quarter, which closes in December, the overall growth impression would be fairly impressive, according to analysts. This is exactly the kind of financial picture that NeXT needs to project if it is to pursue plans of going public.

"If they were selling in that range and were to confirm it to us, that would put them on our list," said Paul Cubbage, principal analyst at Dataquest. The company publishes a yearly list of the six top-selling workstation companies.




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