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Apple Profit Soars on IPod, Computer Sales

Posted on: Tuesday, 11 October 2005, 18:00 CDT

SAN JOSE, Calif. -- Fueled by record sales of its iPod players and strong back-to-school computer sales, Apple Computer Inc. said Tuesday its fourth-quarter net income surged more than 300 percent to $430 million, marking the company's highest ever earnings and sales for a quarter and year.

The results, released after the stock market closed, beat analysts' earnings-per-share expectations but fell short of Wall Street's revenue expectations. Apple shares plunged more than 10 percent in late trading.

For the quarter ended Sept. 24, the Cupertino, Calif.-based company earned $430 million, or 50 cents a share, up from the previous year's fourth-quarter earnings of $106 million, or 13 cents a share.

Excluding a special 12-cents-a-share tax benefit, Apple said it would have earned 38 cents a share. On that basis, the results exceeded the per-share estimate among Wall Street analysts by a penny, according to research firm Thomson Financial.

Revenue rose to $3.68 billion from $2.35 billion in the same fourth quarter last year. Analysts were expecting $3.73 billion in sales for the quarter.

For the year, Apple said it earned $1.335 billion on revenue of $13.93 billion.

"We had nearly $14 billion in revenue - the best in our history," said Peter Oppenheimer, Apple's chief financial officer.

For the first quarter, Oppenheimer said the company expects to reach sales of $4.7 billion, up $1.2 billion, or about 34 percent from the year-ago quarter.

Apple is riding high on the success of its popular and ever-evolving line of iPods. The continued innovation of the iconic music player has nearly tripled Apple's share price from its 52-week low of $18.83 on Dec. 12, 2004.

In the fourth quarter, nearly 6.5 million iPods were sold, bringing cumulative sales of the portable player to about 28 million units, Oppenheimer said. The iPod accounted for nearly a third of the quarter's revenue; Macintosh computers - Apple's historical core product - accounted for about 44 percent with 1.2 million units sold.

The company is set to unveil yet another new product Wednesday, and industry observers speculate it will be an iPod capable of playing video.

Apple shares fell 10.5 percent, or $5.39 in late-session trading after the income report was released. Earlier, the stock gained $1.22 to close at $51.59 on the Nasdaq Stock Market.

Source: Associated Press/AP Online/By MAY WONG

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