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Apple profits healthy as Mac sales rise

Tom Krazit CNET News

Published: 20 Jul 2006 09:35 BST

Apple's third-quarter revenue fell a little short of expectations, but profitability was far higher than expected and Mac sales increased at a healthy clip.

Revenue was $4.37bn, up 24 percent from last year's quarterly revenue of $3.52bn. Net income was $472m, or 54 cents per share, an improvement of 48 percent compared with last year's results of $320m in net income and 37 cents per share. Analysts surveyed by Thomson First Call had been expecting Apple to report $4.4bn in revenue and earn 44 cents per share.

Analysts had been worried that Apple's iPod growth had trailed off a bit in the middle of a long stretch without a significant redesign or a new feature added to the product. Apple sold 8.1 million iPods during the quarter, and Piper Jaffray analyst Gene Munster said in a research report earlier on Wednesday that anything over 8 million would be a "slight positive".

Mac sales were up 12 percent compared with last year, during what was considered a poor quarter for the PC market. Apple said 75 percent of all Macs sold during the period used Intel's chips.

The outlook for the next period will probably disappoint some investors. The company predicted fourth-quarter revenue would be about $4.5bn to $4.6bn, less than the $4.9bn analysts had been expecting. Apple executives will hold a conference call to discuss results.