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Strong Sales Drive 67% Jump In Apple's 4th-Quarter Profit

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The Associated Press

Published: October 23, 2007

SAN JOSE, Calif. - Apple's fiscal fourth-quarter profit jumped 67 percent and easily beat Wall Street expectations, capping a record-breaking year that saw unprecedented momentum in its Mac business, ceaseless consumer interest in its iPod players and a successful introduction of the iPhone.

For the three months ended Sept. 30, Apple said Monday that it earned $904 million, or $1.01 a share, compared with $542 million, or 62 cents a share, in the year-ago quarter.

Revenue totaled $6.22 billion, compared with $4.84 billion in the same quarter last year.

Analysts polled by Thomson Financial were expecting earnings of 86 cents a share on sales of $6.07 billion.

Apple's stock price, which has more than doubled since January, rose $3.94, or 2.3 percent, to close at $174.36. After the earnings report, shares climbed $9.50, more than 5 percent, in extended trading.

Cupertino-based Apple said it shipped a record 2.16 million Macs in the quarter, a rise of 34 percent, while it sold 10.2 million iPods, up 17 percent. In the first full quarter of iPhone sales, Apple said it sold 1.12 million units, bringing the total to 1.39 million since the product debuted June 29.

For the fiscal year, Apple earned a record $3.5 billion, up more than 75 percent from last year's $1.99 billion. Yearly sales topped $24 billion, a 24 percent jump from fiscal 2006.

'We had a fantastic quarter and year,' said Peter Oppenheimer, Apple's chief financial officer.

Apple's fortunes have skyrocketed in recent years as its iPods became a cultural phenomenon. The portable players, which work on Macs as well as Microsoft Corp. Windows-based machines, have also drawn more people to Apple's software and design, leading to what analysts call a 'halo effect' on Mac sales.

After hovering for years with a 2 percent to 3 percent share of the PC market in the United States, Apple's slice has grown to 8 percent, according to figures from market researcher Gartner Inc.

Now, many investors are betting Apple's foray in the cell phone market will be another lucrative engine.

Based on income from the iPhone alone, 'I expect Apple's earnings to continually grow materially at 50 percent a year, for the next three years,' said Stephen Coleman, chief investment officer at Daedalus Capital LLC.

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