Apple clocks highest Q4 revenue in 9 years

Duncan Martell

SAN FRANCISCO: Apple Computer Inc. reported that its quarterly profit more than doubled as it sold more than 2 million iPod digital music players and said results for the current quarter would top Wall Street estimates.

"It was a terrific quarter on every level," Steve Jobs, Apple's chairman, chief executive and co-founder informed.

The company, aiming to build on its successful retail store strategy, also said it would be opening the first six of what it calls mini stores in the coming days. When Apple opened its first stores in the midst of the technology recession, it prompted concern that the move would weigh on results.

"When we rolled out the stores everybody said we were nuts," said Jobs, who several weeks ago returned to work after recuperating from surgery. "But we've had tremendous success with them."

Net income for the fiscal fourth quarter ended September 25 rose to $106 million, or 26 cents per share, from $44 million, or 12 cents per share, a year ago. Revenue rose 37 percent to $2.35 billion, which Apple said was its highest fourth-quarter revenue in nine years.

Excluding 1 cent per share in restructuring charges, Apple had a profit of 27 cents a share. On that basis, analysts had forecast a profit, on average, of 18 cents a share, on revenue of $2.15 billion.

Apple executives suggested on a conference call that the results could have been even stronger had it not been for constrained supplies of Apple's G5 microprocessor, which is made by IBM Corp.

IBM has had trouble meeting demand for the chips, which power Apple's high-end PowerMac desktop PC and its recently introduced iMac.

Tim Cook, head of worldwide sales and operations for Apple, said that the company shipped more G5-based PCs in September than it did in both July and August.

"That has given us confidence that this quarter will be materially better," he said, referring to increased shipments of iMac and PowerMac, which carries high profit margins.

ROBUST SALES OF iBOOK, POWERBOOK

Apple Chief Financial Officer Peter Oppenheimer said the far-better-than-expected quarter reflected robust sales of the iBook and PowerBook notebook PCs, a 95 percent rise in Apple's retail store business and strong sales to U.S. schools.

"This is a company that once traded at cash and with the advent of the iPod as well as the halo effect it's having on Mac sales, this is very impressive," said analyst Shannon Cross of Cross Research.

In the fourth quarter, PowerBook revenue climbed 20 percent to $419 million, while iPod revenue more than quadrupled to $537 million and accounted for 23 percent of total revenue.

Apple shipped 2.02 million of the popular digital music players, up six-fold from a year ago.

For the current, first quarter, Apple forecast a per-share profit of 39 cents to 42 cents on revenue of $2.8 billion to $2.89 billion. Analysts had expected a profit of 28 cents per share, on average, within a range of 23 cents to 34 cents, on revenue of $2.52 billion.