APPLE Computers, which employs 1,200 people in Cork, surprised investors yesterday, reporting fourth quarter profits of $25 million (£15.6 million). Although the earnings compare to $60 million for the same period in 1995, analysts had predicted losses of $37 million.

The company said fourth quarter revenue for its fiscal year declined by 23 per cent to $2.32 billion (£1.5 billion), against $3 billion for fiscal 1995.

The results meant the only profitable quarter for Apple this year, and follow months of management turmoil.

Industry analysts attributed the profit to Apple's aggressive cost cutting, a bigger than expected exodus of employees and lower prices for key components, such as memory chips. Some suggested that Apple may now remain profitable in coming quarters, and that this would bolster confidence among consumers that it will be around for years, keeping them from switching to IBM compatible personal computers.

In February, the company hired a new chairman and chief executive, Dr Gilbert Amelio. He immediately initiated a severe costs reduction plan, and invested in a range of new products to be released in the months to come.