Apple swings to profit

SAN FRANCISCO: Apple Computer Inc. swung to a quarterly profit as strong back-to-school sales and brisk demand for its iPod digital music players lifted revenues above analysts' expectations.

Apple said shipments of Macintosh computers in the fourth quarter rose 7 percent from the year-ago quarter, while shipments of its iPod digital music players rose 140 percent.

Looking to the current, first quarter, Apple said it expects a sequential increase in revenue to about $1.9 billion and a "slight sequential increase" in net earnings per share from the just-completed fourth quarter.

Analysts currently expect Apple to post a per-share profit of 13 cents in its first quarter on revenue of $1.79 billion..

Chief Financial Officer Fred Anderson said it was a solid quarter, and that the iconic computer maker was well positioned for the important holiday shopping season that gets underway after the U.S. Thanksgiving holiday.

"Back-to-school was good for us, we saw particularly strong sales of our iPods and PowerBooks (laptops)," Anderson told Reuters in a telephone interview. "We had very good sales through our Apple retail stores, online stores and campus retailers."

"We're really well positioned for a strong holiday season," Anderson said, pointing to a number of recent product announcements, including new Mac computers and iPod digital music players.

Apple said it had net income of $44 million, or 12 cents a share for its fourth quarter ended Sept. 27, compared with a year-ago net loss of $45 million, or 13 cents a share, which was largely due to charges from investment losses. Revenue rose to $1.72 billion from $1.44 billion.

"I think Apple was a big participant in the upswing we've seen in demand for notebooks," said Roger Kay, an analyst at market research firm IDC. "The iPod unit sales are good."

Shares of Apple edged up to $24.87 in trading after the bell from a Nasdaq close of $24.82. In regular trade before the earnings release, Apple stock rose 27 cents, or 1.1 percent.

Excluding gains and an accounting adjustment, Apple said it had a quarterly profit of $29 million, or 8 cents a share.

On that basis, analysts had forecast Cupertino, California-based Apple to post net income of 7 cents a share, on average, within a range of 6 cents to 8 cents, on revenue of $1.65 billion, according to Reuters Research.

MUSIC IN THE MAKING

Apple's results come a day before an event Apple has scheduled in San Francisco. "(We'll) have some exciting news regarding our music efforts tomorrow," Apple Chief Executive Steve Jobs said in a statement.

Analysts widely expect Apple to unveil its long-promised Windows version of the iTunes digital music management software and its online music store, which it unveiled in late April for Mac users only.

Apple's retail stores had a strong quarter, Anderson said, with revenue of $193 million and their first quarter in the black, with a profit of $1 million.

Sales of its PowerMac computers, including the recently announced G5, rebounded to 221,000 units, Anderson said, which was "substantially" above the prior quarter.

Year-to-date Apple stock is up 73 percent, compared with a 54 percent increase in the American Stock Exchange Computer Hardware Index over the same period.

© Reuters