Apple Q2 Profit Rises 41 percent fueled by iPod

Apple’s ipod - a small white box that has revolutionised the way we buy and listen to music, topping the sales at 8.5 million in second quarter fueled the profits of the California based company in the most recent quarter. After the closing bell Wednesday, Apple Computer Inc. announced financial results for its fiscal second quarter, reporting that profits in the most recent quarter surged 41 percent from a year ago to $ 410-million, beating Wall Street targets, pumped up by red-hot sales of its highly successful iPod digital music player.

However, Apple issued a sales and forecast for the current quarter that lagged analysts’ expectations. The iPod player, which Apple introduced in October 2001, has rejuvenated the Mac maker and it now has more than 60% of the market for digital music players.

Earnings for the fiscal second quarter to April 1 equated to 47 cents per share as compared to 34 cents during the same quarter a year earlier, according to the Cupertino, California, company. The earnings topped analyst expectations by four cents a share as Apple revenues rose 34 percent to $ 4,35-billion dollars for the quarter. Shares of Apple, which had fallen 57 cents to close at $ 65.65 in regular Nasdaq trade, rose 4.2 percent to $ 68.40 in after-hours trade following its earnings report. For the current quarter, Apple said it expects earnings per share in a range of 39 cents to 43 cents on revenue of $4.2 billion to $ 4.4 billion. Analysts expect earnings per share of 47 cents, on average, on revenue of $ 4.72 billion.

Macintosh personal-computer sales also rose, even as Apple is in the midst of moving its entire computer product line to using Intel Corp. chips from those made by IBM Corp. Apple said that it sold 1.11 million Mac computers, almost 4% higher over the 1.07 million units it shipped a year ago. Analysts are expecting Apple to grow beyond its current 3% to 4% share of the computer market because of the switch. Steve Jobs, Apple’s CEO said, "Our transition to Intel processors is going very well, and our music business just experienced another quarter of outstanding growth." Apple boss Steve Jobs was naturally upbeat in his results announcement.

Apple’s chief financial officer Peter Oppenheimer predicted the company’s third quarter would see revenue of about $ 4,2-billion to $ 4,4-billion. Apple noted that it anticipates GAAP earnings of about $ 0.39 to $ 0.43 per share. Non-GAAP earnings are expected in the range of about $0.43 to $0.47. Analysts expect earnings of $ 0.47 per share on revenue of $ 4.73 billion for the third quarter. Credit Suisse expected the company to issue a conservative guidance for the third quarter. The brokerage expected the company to guide to flat to sequential revenue decline for the quarter.

Apple shipped 1,112,000 Macintosh computers and 8,526,000 iPods during the quarter ending April 1, marking a four percent growth in Macintosh sales and a 61 percent leap in iPod shipments from the same period in 2005. Sales of iPods and songs and videos sold on its iTunes online store accounted for 50 percent of revenue and sales of Macs represented 36 percent of revenue. The iPod, which Apple introduced in October 2001, has rejuvenated the Mac maker and it now has more than 60 percent of the market for digital music players. Apple expects the average selling price on the iPod to fall in the current quarter."We expect them to be down a little bit in the June quarter," Oppenheimer said.

The company’s iTunes Music Store, meanwhile, has been beset by legal tiffs, from a dispute in France over its digital security restrictions to a challenge from the Beatles’ record company, Apple Corps, over use of the Apple name to sell music.