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Apple profit surges on iPod sales

Apple Computer said quarterly profit more than tripled, bolstered by sales of its iPod digital music players.
/ Source: news services

Apple Computer Inc. Wednesday beat market expectations by posting earnings that were more than triple its year-earlier results, boosted by sales of its popular iPod digital music players.

For its third quarter ended June 26, Apple said it had net income of $61 million, or 16 cents a share, up from $19 million, or 5 cents a share, in the year-earlier period. Revenue rose 30 percent to $2.01 billion from $1.55 billion.

Excluding 2 cents a share in restructuring charges, Apple said it had a profit of $67 million, or 17 cents a share. That exceeded the average 15 cents forecast by analysts polled by Reuters Estimates. Revenue also beat the average estimate of $1.94 billion.

“It was an outstanding quarter — our highest third-quarter revenue in eight years,” said Apple’s chief executive Steve Jobs. “Our Mac-based revenue grew a healthy 19 percent, and our music-based revenue grew an incredible 162 percent.”

Looking ahead, Apple said it expects to post revenues of $2.1 billion for the current quarter and earnings 16 to 17 cents per share, including a restructuring charge of 1 cent per share.

Apple, based in Cupertino, Calif., said it shipped 876,000 Macintosh computers in the quarter, up 14 percent from a year earlier, and 860,000 iPods, up 183 percent.

Apple shares jumped in extended hours trading, rising to $30.48, up from $29.58 at the Nasdaq close.

Peter Oppenheimer, Apple’s chief financial officer, said sales of Macintosh computers, especially laptops, accounted for 58 percent of revenue growth.

Demand for the new mini version of the popular iPod has been “staggering” in the United States and continues to far outstrip supply, Apple’s worldwide vice president of sales Tim Cook told analysts during a conference call. “Unprecedented” orders for European shipments, set to begin July 24, will mean continued backlogs probably through the end of the year. He said it was hard to predict when supply would catch up with demand.

Earlier this week, Apple announced that 100 million songs had been sold at its iTunes Music Store — a milestone that took three months longer than the company had hoped but still a significant benchmark that proved Apple’s dominance in the online music market.

The online music store eked out a “small profit” during the quarter, Oppenheimer said.

Apple July 2 announced a delay in the release of the next-generation iMac until September, meaning the company will miss the important back-to-school season.

The new iMac faces the same microprocessor supply problem from IBM that has already delayed Apple’s Power Mac G5 product shipments, Oppenheimer said. If the problems aren’t resolved, fourth-quarter results might change, he said.

Reuters and The Associated Press contributed to this article.