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Fri, Jul 16, 2004 - Page 12 News List

Apple announces stronger Q3 profits than expected

EARNINGS Laptops and iPods were key to the firm's performance, with the company's chief financial officer describing the demand for mini iPods as ``staggering''


Apple Computer Inc posted stronger-than-expected fiscal third-quarter profit and revenues, citing heavy sales of its computers and portable music players.

For the three months ended June 26, Apple said on Wednesday, it earned US$61 million, or US$0.16 per share, compared with US$19 million, or US$0.05 per share, in the same period last year. Revenues increased 30 percent to US$2.01 billion. Excluding an after-tax restructuring charge of US$6 million, the company's net profit would have been US$67 million, or US$0.17 per share.

Wall Street analysts were expecting the Cupertino, California-based company to earn US$0.15 per share on sales of US$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."

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 US 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.

Facts and figures

* Apple earned US$61 million, or US$0.16 per share from April to June

* It was Apple's highest third-quarter revenue in eight years.

* Mac-based revenue grew 19 percent and music-based revenue grew 162 percent

"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 on Wednesday. If the problems aren't resolved, fourth-quarter results might change, he said.

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