Solidifying fears of a slowing US personal computer sector, Apple reported results for its third fiscal quarter Tuesday showing revenue down nearly 20 per cent from the same quarter a year ago and net income plunging by more than two-thirds. For the quarter ended June 30, Apple reported earnings per share of $0.17 on revenue of $1.47 billion. About 44 per cent of its income came from overseas. The company reported earnings of $0.55 per share on revenue of $1.8 billion the same quarter a year ago. While showing better-than-expected per share earnings, the company fell short of expectations for its revenue. A consensus estimate from 17 analysts polled by Thomson Financial/First Call expected Apple to report earnings per share of $0.15 cents on revenue of $1.6 billion. Net income for the quarter fell to about $61 million, Apple said, down from $200 million in the third quarter of 2000. The quarter did point to a return of Apple's penetration in the US education market, according to a report issued Tuesday by research group International Data Corp. (IDC). The report put Apple in the top spot for desktops and laptop computers used in the classroom. Apple holds 27.7 per cent market share for desktops in the classroom and 34.7 per cent with its laptops, the research firm said. Apple has nearly twice as many desktop and portable computers in schools as its nearest competitor, according to IDC. "We have turned the corner in education and believe we can begin to grow it again just as we have historically," Apple chief financial officer Fred Anderson said Tuesday in a conference call. Apple's financial results come at the start of the semiannual Macworld Expo event, which kicked off Tuesday in New York. Chief executive officer Steve Jobs is scheduled to address the conference in a keynote Wednesday. He is expected to announce the latest news in Apple's product line as well as additional locations for Apple retail stores. The company launched its first retail store two months ago. Since then, it has added locations in 13 other major US cities, aiming for a goal of 25 stores in operation throughout the US by the start of the holiday shopping season. The company is on track to meet its deadline and expected ten new stores to open in August around the country, Anderson said. Apple is "encouraged" by its results from the first two stores in operation, and they are being well received by consumers and resellers, according to Anderson. "There's been favorable comments from several of our resellers that they feel that our new retail stores can be complimentary to their efforts" Anderson said. "Obviously there might be concern with a few of the resellers where (the new stores) are in their own back yard." Anderson said earlier this year that the retail operation would break even by this fiscal year's end and turn a small profit by the second quarter of the next fiscal year. Financial impact from the retail stores did not show up in the third quarter results, and probably won't have a noticeable impact until the fiscal first quarter in 2002, Apple said. Despite its new resale channels - and continued growth in online sales, which accounted for 40 per cent of its channel sales - Apple has suffered continued weakness in its line of products during the quarter. Analysts note that the iMac computer line, the new, low-priced iBook laptop and Apple's new Titanium computers did not compensate for overall weakness in the personal computer sector. Apple also suspended production of the PowerMac G4 Cube this month due to insufficient demand. Sales of the PowerMac G4 line declined 17 per cent sequentially from the fiscal second quarter and 36 percent from the third quarter a year ago. Powerbook sales also declined, by 23 per cent sequentially and 9 per cent from a year ago. Sales of the iMac inched up from the previous quarter, falling about 36 per cent from the third quarter 2000, Apple said. Demand for its new iBook laptop, however, grew 270 per cent from the second quarter and about 60 per cent from the third quarter a year ago. The company released a slimmer, lighter version of the iBook in May and shipped more than 182,000 of them in the quarter. Anderson said the company compiled a backlog of orders for the computer as demand exceeded supply. Worldwide, Apple saw its biggest sequential sales growth in Japan and the Americas. Revenue in the European region, however, declined 23 per cent from the immediate prior quarter and 22 per cent from the third quarter of 2000. Revenue for the fourth quarter is expected to increase slightly from the third quarter, Apple said, but the company does not expect a recovery from the current industry slowdown despite seasonal trends or an increase in educational sales. "We expect a slight uptick in revenue for the September quarter," Anderson said. "But we're expecting a continuation of the week economic environment."