Apple Computer posted its first quarterly loss in three years last night but the figures were not quite as bad as the market had expected. The gloom was offset by strong figures and bullish comment from IBM.

The Apple figures, released after US stock markets closed, showed a net loss of $195 million (€209 million) - or 58 US cents per share - in the first quarter compared with net profit of $183 million or 51 US cents per share a year ago. The forecast had been for losses extending to 65 US cents per share.

A change in accounting procedures helped the bottom line. Before the adjustment, the loss was 61 US cents per share.

The PC maker, which employs about 1,000 people at its plant in Cork, warned several weeks ago that its first-quarter revenue would fall "substantially" below already lowered projections.

The company posted net sales of $1.01 billion, well down on the $2.34 billion a year ago. It said it expected to return to profitability in the current quarter and forecast full-year revenues of about $6 billion.

IBM, the world's largest computer maker, beat market forecasts with a 28 per cent rise in fourth-quarter profits.

The company, which employs 1,750 people in Dublin and wants to expand this to 5,000 by the end of this year, said net profit in the three months was $2.7 billion, or $1.48 per share, up from $2.1 billion, $1.12 per share in the same period a year ago. The consensus forecast among analysts was for earnings per share of $1.46.

Sales of $25.6 billion, an increase of 6 per cent from sales of $24.2 billion in the fourth quarter a year ago, were roughly in line with the analysts' consensus estimate for sales of $25.5 billion. IBM said sales would have risen 12 per cent were it not for foreign currency effects.

The firm's chief executive, Mr Louis Gerstner, said there was some uncertainty about the US economic climate but he expected growth in Europe and Asia to counterbalance any US weakness.

European revenues rose 3 per cent of $7.4 billion in the quarter, with Asian sales rising by 13 per cent. By product category, the firm showed the strongest growth in hardware sales, which rose 10 per cent to $11.4 billion. Software sales slipped 1 per cent to $3.6 billion, with global services up 5 per cent to $9.2 billion. Gross profit margins widened slightly to 37.7 per cent, from 36.7 per cent a year ago.

In the fourth quarter, IBM began to ship the seventh generation of its mainframe computer.

Analysts had expected those sales to help it offset weak personal computer demand and slow corporate spending that hurt some of its rivals.

IBM shares closed at $96.68-3/4, up $3.93-3/4, or 4.25 per cent, on the New York Stock Exchange before the results were delivered.