Apple Profit Soars on New IPod Sales
Friday, July 16th 2004, 12:03 pm
By: News On 6
SAN JOSE, Calif. (AP) _ Apple Computer Inc. shares surged more than 11 percent Thursday after the company announced that strong sales for its computers and ``staggering'' demand for iPod portable music players helped more than triple third-quarter profits.
For the three months ended June 26, Apple said after the bell Wednesday that it earned $61 million, or 16 cents per share, compared with $19 million, or 5 cents per share, in the same period last year. Revenues increased 30 percent to $2.01 billion.
Excluding an after-tax restructuring charge of $6 million, the company's net profit would have been $67 million, or 17 cents per share.
Wall Street analysts were expecting the Cupertino, Calif.-based company to earn 15 cents per share on sales of $1.94 billion, according to a survey by Thomson First Call.
``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.''
Investors responded favorably. Apple shares gained $3.35 to close at $32.93 Thursday on the Nasdaq Stock Market.
Apple shipped 876,000 Macintosh computers in the quarter, up 14 percent from the year-ago period. The segment accounted for 58 percent of the quarter's revenue growth, Apple's chief financial officer Peter Oppenheimer said in an interview. He said most of the Mac growth was driven by higher laptop computer sales, as ``the world is going more mobile.''
Also, Apple shipped 860,000 iPod portable players, bringing the product's lifetime total to 3.7 million units, Oppenheimer said.
The demand for the mini version of the popular player has been ``staggering'' in the United States and continues to far outstrip supply even though the product's hard-disk provider has ramped up production, 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, also will mean continued backlogs probably through the end of the year.
It will be difficult to predict when supply will catch up with demand, Cook said.
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 announced on July 2 a delay in the release of the next-generation iMac until September. That means Apple will miss the back-to-school rush, a critical sales period for computer makers.
The new iMac faces the same microprocessor supply problem from IBM that has already delayed Apple's Power Mac G5 product shipments, Oppenheimer said Wednesday. If the problems aren't resolved, fourth-quarter results might change, he said.
Still, Apple officials gave an optimistic outlook.
For the fourth quarter, the company expects earnings of 16 cents to 17 cents per share, including a restructuring charge of 1 cent, on revenue of $2.1 billion, Oppenheimer said. For the fiscal year, the company expects to hit $8 billion in sales, a 29 percent increase from the previous year.