TMO Reports - Apple Sings a Happy Tune; $290 Million Q2 Profit on iPod Growth (UPDATE)

by , 4:30 PM EDT, April 13th, 2005

It was another successful quarter for Apple Computer, as the Mac and iPod maker exceeded estimates posting a net fiscal second-quarter profit of US$290 million, or 34 cents a share -- 10 cents better than the street estimate.

Revenue for the quarter was $3.24 billion, up 70% from the year-ago period of $1.91 billion. Gross margin was 29.8%, up from 27.8% in the year-ago quarter. International sales accounted for 40% of the quarter's revenue, the company said.

Analysts surveyed by Thomson First Call had forecast Apple to earn 24 cents a share on $3.21 billion in revenue. Apple predicted in January that it would earn 20 cents a share in the just-completed quarter, on $2.9 billion in sales.

During the same period a year ago, Apple earned $46 million, or 6 cents a share on $1.9 billion in revenue. The Q2 profit rose more than sixfold compared to a year ago.

As early as Wednesday afternoon, analyst Keith Bachman of Banc of America Securities warned clients that Apple had little room for surprise above $0.24 to $0.25 cents per share.

Apple said it sold 5.3 million iPods in the quarter-- at the high end of the most optimistic estimates. In the Christmas quarter, the company sold 4.6 million iPods, and only 807,000 iPods in the year-ago quarter.

As for Macs sales, the company said it shipped 1,070,000 CPUs during the period, representing a 43% jump from the quarter a year ago, when the company sold 749,000 Macs. In the December quarter, the company sold 1,046,000 Macs.

"We're very pleased to report 70% revenue growth and a 530% increase in net income," Peter Oppenheimer, Apple's chief financial officer, said in a prepared statement.

Apple stock (AAPL) closed down $1.62 on Wednesday, or 3.80% to $41.04 on volume of 42.15 million shares.

Apple forecasted earnings of 28 cents a share on $3.25 billion in sales for the current quarter. Analysts had previously forecast a profit of 24 cents a share on $3.21 billion in sales.

For fiscal year 2005, analysts are looking for $1.11 in per-share earnings on sales of $13.34 billion. Apple did not provide guidance for the full year.

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