July 15, 1998: Apple reports its third profitable quarter after the return of Steve Jobs, continuing the company’s remarkable turnaround.

Apple earns $101 million for the quarter, largely thanks to the success of the Power Mac G3. In the same quarter one year earlier, Apple lost $56 million. This is the first time in three years Apple has managed three straight profitable quarters.

The return to profitability

Steve Jobs first announced Apple’s return to profitability at that January’s Macworld Expo, saying that the company’s new strategy had, “all come together for us.”

There were several factors driving Apple’s success. Perhaps the most notable of these was the success of the Power Macintosh G3 computer, which debuted in late 1997. By July 15, 1998, this machine had sold 750,000 units, qualifying it is a big hit for the time.

“Apple had a terrific quarter,” Jobs said at the time. “We sold a record number of Power Macintosh G3 computers, customers love our new PowerBooks, Apple earned its highest profit in years and we ended the quarter with the lowest inventory level among the major PC players.”

Behind the scenes, Apple management cultivated a new leanness. Jobs carried out aggressive cost-cutting — killing failing products, slashing R&D spend, and getting rid of a number of employees he deemed to be expendable.

The results were immediately evident in Apple’s earnings. Despite profits increasing, Apple actually brought in slightly less revenue than it had one year earlier. Revenue for the quarter was $1.4 billion, compared to $1.7 billion a year earlier. Apple’s gross margins were 25.7 percent, a three-year quarterly high. This allowed Apple to return to profitability faster than anyone dared hope.

“It truly is stunning that they should get that far ahead of what all of us expected,” Daniel Kunstler, at the time a technology analyst at JP Morgan, told CNN. “They were really able to do it on the margins.”

One hit product away

While the results were certainly dazzling, what Apple needed was a product that would take it to the next level. Fortunately, it had the iMac G3 up its sleeve. Going on sale on August 15, 1998, the brightly colored translucent Macintosh helped turn around Apple for good.

Add in the iBooks and, a couple of years later, the iPod, and Apple would be well on its way to becoming the titan we know today. Pretty amazing how much things can change in 20 years, right? (For comparison, Apple raked in $61.1 billion in this year’s most recent financial quarter.)

Were you an Apple fan in 1998? Let us know your memories of this time in the comments below.