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Apple profit soars on iPod, Mac sales

Associated Press

SAN JOSE, Calif. Apple Inc. blew past Wall Street expectations Wednesday, posting quarterly profit that jumped by 88 per cent fuelled by strong sales of its iPod players and Macintosh computers.

In the first three months of the year, the Cupertino, Calif.-based company said it earned $770-million, (U.S.) or 87 cents per share, up from $410-million, or 47 cents per share, in the year-ago period. Sales were $5.26-billion, up 21 per cent from last year.

Analysts, on average, were looking for earnings of 64 cents per share on sales of $5.17-billion, according to a poll by Thomson Financial.

Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter, representing a 36 per cent growth in Macs and 24 per cent growth in the music players.

“We are very pleased to report the most profitable March quarter in Apple's history,” said Peter Oppenheimer, Apple's chief financial officer.

The company said it expects revenue of about $5.1-billion and earnings per share of about 66 cents in the current quarter, which is the third in Apple's fiscal year. Apple's projections are actually lower than the forecasts Wall Street had before Wednesday.

Shares of Apple closed at $95.35, on the Nasdaq Stock Market, then leaped to $102.73 in after-hours trading.

At yesterday's closing price, the shares have gained about 11 per cent this year, boosted partly by anticipation over Apple's iPhone, to be released in June. Investors have largely remained unfazed by Apple's stock options troubles, with industry analysts widely predicting Steve Jobs' position as chief executive offer will remain intact.

But legal experts say Mr. Jobs is still in legal limbo: An investigation by federal prosecutors continues and new accusations emerged Tuesday from the company's former chief financial officer, alleging Jobs may have had a more significant role in the backdating of options than previously stated.

The new allegations came on the same day the former CFO, Fred Anderson, immediately settled his case with the U.S. Securities and Exchange Commission, which filed backdating-related civil charges against Anderson and Apple's former general counsel Nancy Heinen. The SEC did not charge any other individuals in the lawsuit and said it did not plan to pursue further action against Apple itself.

Apple's board of directors, which includes former vice-president Al Gore and Google Inc. CEO Eric Schmidt, issued a statement yesterday saying it would not enter a public debate with Mr. Anderson. It also defended the conclusion of Apple's internal probe last year that cleared Mr. Jobs and current management of any wrongdoing.

“We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple,” said six board members in a statement today. “The SEC investigated the matter thoroughly and its complaint speaks for itself, in terms of what it says, what it does not say, who it charges, and who it does not charge.”

Mr. Jobs, 52, didn't unveil new Mac or iPod designs last quarter, his usual strategy for spurring sales, though analysts expect new products later this year to spur back-to-school and holiday demand. His one major product introduction was Apple TV, a device released last month that beams digital videos from computers to televisions.

With a file from Bloomberg News

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