Apple's Profit Soars, Shares Gain

Riding high on record sales of Macintosh computers and gains in the mobile-phone market, Apple Inc. reported a 67 percent jump in the fourth-quarter profit. Not only did the results beat analysts’ estimates, they created a history of sorts as the annual sales breached the $20 billion mark for the first time in Apple's 31-year history

During the back-to-school shopping season, the company sold 2.16 million Macs. It also sold 10.2 million updated models of iPod media players as against the July forecast of 730,000 units.

The Mac still forms the backbone of the company and accounted for half of revenue last quarter. Sales rose 40 percent to $3.1 billion. The Mac which had a blow away quarter helped Apple's PC market share in the U.S. climb to 8.1 percent from 6.2 percent.

Mike Abramsky, an analyst at RBC Capital Markets, said, "Apple is reaching a strong inflection point in terms of PC market share. Even though there's a lot of focus on the iPhone, it's really the Mac that's driving the growth in revenue and earnings per share."

Net income rose to $904 million, from $542 million a year earlier. Apple said it expects earnings per share of $1.42 on sales of $9.2 billion. That would translate to year-over-year EPS growth of 25 percent and sales growth of 29 percent. The company also reported that its gross profit margin was 33.6 percent, up from 29.2 percent in the year-ago quarter.

Cupertino, California- based Apple has had an amazingly solid quarter and they seem to be hitting on all cylinders. Roger Kay, an analyst at Endpoint Technologies in Wayland, Massachusetts, said, "They knocked the cover off the ball."

Apple Chief Financial Officer Peter Oppenheimer was upbeat about the future and said, "We're looking forward to our best December quarter ever, as we head into the holiday buying season with the strongest product lineup in Apple's history."

Peter Oppenheimer’s confidence stems from the fact that Apple is set to launch Leopard, a new version of Apple's Mac OS X operating system. Leopard boasts of more than 300 new features and makes its debut as soon as Friday. The expectations are high from iPhone and the new iPod Touch which was launched on October 1.

Apple shares which have more than doubled this year jumped 7 percent in after-hours trading. They rose as much as $13.64 to $188 in extended trading.