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Fri, Apr 27, 2007 - Page 10 News List

Apple's profits soar 38% in Q1

AP , SAN JOSE, CALIFORNIA

Apple Inc blew past Wall Street expectations on Wednesday, posting quarterly profits that jumped 88 percent, fueled by strong sales of its iPod players and Macintosh computers.

Shares of Apple soared more than 6 percent on the news, reaching above US$100 for the first time.

In the first three months of the year, the Cupertino-based company said it earned US$770 million, or US$0.87 per share, up from US$410 million, or US$0.47 per share, in the year-ago period.

Sales were US$5.26 billion, up 21 percent from US$4.36 billion last year.

Analysts, on average, were looking for earnings of 64 cents per share on sales of US$5.17 billion, according to a poll by Thomson Financial.

Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter, representing a 36 percent growth in Macs and 24 percent growth in the music players.

Sales from its market-leading iPods and other music-related products accounted for 44 percent of the quarter's total revenue.

"We are very pleased to report the most profitable March quarter in Apple's history," said Peter Oppenheimer, Apple's chief financial officer.

Helped by favorable component price drops, notably in memory parts, Apple achieved gross margins of more than 35 percent, up from about 30 percent in the quarter a year ago.

Oppenheimer, however, cautioned analysts during a conference call that such high margins were likely "not sustainable."

He predicted gross margins of 32 percent for the current quarter.

The company said it expected revenue of about US$5.1 billion and earnings per share of about 66 cents in the current quarter, which is the third in Apple's fiscal year. Apple's projections are actually lower than the forecasts Wall Street had before Wednesday, but analysts say Apple's forecasts are typically conservative.

Expectations for the iPhone are continuing to run high, and analysts pressed Apple executives for details on Wednesday. Company officials refused to predict the number of units that would be available at launch in late June.

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