For its fiscal fourth quarter, which ended on 29 September, the maker of Macintosh computers and software reported a net profit of $66m (£46m), or $0.19 per share. In the same quarter last year, Apple reported $170m in adjusted profit, or $0.47 per share.
Sales for the quarter totalled $1.45bn, which was down 22% from the same quarter last year.
The consensus of 18 analysts polled by Thomson Financial/First Call was that Apple would report earnings of $0.16 per share on sales of $1.48bn (£1.02bn).
Apple shipped 850,000 hardware units during the quarter, but saw a decline in every line of computers except its PowerMac G4 and iBook lines. However, the company sold more than 250,000 iBooks; up from 89,000 in the same quarter last year.
While Apple's sales have been affected as part of a decline in the overall global PC industry, the company has managed to avoid much of the sales shortages and layoffs that have hit other major computer makers.
"We are investing in some areas, like our new retail initiative and we are trimming where appropriate," said Fred Anderson, Apple's chief financial officer. "We're trying to [keep] our headcount relatively flat and we don't expect massive layoffs across the board."
Apple has also seen upward momentum during the quarter with the release of a tuned-up version of its Mac OS X operating system. Version 10.1 was widely released on 25 September, along with a raft of native software applications.
The company expects the new operating system to drive sales next quarter, although the new Mac OS X faces growing competition from Microsoft, which will release Windows XP next week and spend millions of dollars to market the software in the next few months.
"We can't outspend Microsoft, and we're not going to try in terms of advertising," Anderson said. "Apple's going to get press by bringing to market innovative products."
A "breakthrough digital device" is to be unveiled by Apple next week. The company has not yet said what the new release would be, but said it would not be a new Mac.
Non-US sales in the fourth quarter accounted for 41% of Apple's total sales for the quarter. All of its markets, including the US, saw a decline in sales compared to the same quarter last year.
"Japan was the weakest," said Anderson. "I think the economy there is the weakest of any major geography."
Looking ahead, Apple said it expected to report fiscal first-quarter 2002 revenue of at least $1.4bn (£0.96bn) and earnings per share of $0.10.
"The main impact is the top line, meaning sales, and we're cautious about sales as we approach the holiday season," Anderson said. "As we look to next year and the December quarter, we just don't have a feel for the consumer market and what that environment is going to look like."