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Apple posts Q2 growth despite iPod sales dip

Posted: 21 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Apple? iPod? net income? Macintosh? computer?

Despite a slight drop off in iPod sales, Apple Computer Inc. posted a net income of $472 million on sales of $4.37 billion for its third quarter of fiscal 2006, ended July 1, the company said Wednesday (July 19).

The net income, which equates to 54 cents per share, was up 48 percent from the $320 million that Apple posted for the same period of 2005. Sequentially, the profit was up 15 percent from the $410 million Apple posted for the second fiscal quarter.

Revenue of $4.37 billion was up 24 percent year-to-year and up negligibly from $4.36 billion in the fiscal second quarter.

The company's second quarter income exceeded consensus analyst expectations, which called for earnings of roughly 44 cents per share. Second quarter revenue came in slightly below consensus analyst expectations, which called for $4.4 billion.

Shipments of iPod music players slipped sequentially, but remained strong. Apple shipped more than 8.1 million iPods and more than 1.3 million Macintosh computers during the quarter, the company said. Apple shipped more than 8.5 million iPods in the fiscal second quarter.

"We're thrilled with the growth of our Mac business, and especially that over 75 percent of the Macs sold during the quarter used Intel processors," said Steve Jobs, Apple's CEO, in a statement. "This is the smoothest and most successful transition that any of us have ever experienced."

Second quarter gross margin was 30.3 percent, Apple said, up from 29.7 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter's revenue, Apple said.

Apple expects to report fiscal fourth quarter revenue of $4.5 billion to $4.6 billion, with GAAP earnings per share of 46 to 48 cents, according to Peter Oppenheimer, chief financial officer. Including an estimated 3 cents per share expense impact from non- cash stock-based compensation, Apple expects to post non-GAAP earnings per share of 49 to 51 cents, Oppenheimer said.

Consensus analyst expectations for Apple's fiscal fourth quarter called for revenue of more than $4.9 billion and earnings per share of roughly 52 cents.

- Dylan McGrath
EE Times

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