Apple Posts Record Mac Sales, Strong Profits

Apple reports a 73 percent increase in profits on strong Macintosh and iPod sales.

A day after Apples stock dropped 6 percent, CEO Steve Jobs reported that the company produced revenue of $5.41 billion and net quarterly profit of $818 million for its third fiscal quarter.

This compares with $4.37 billion in revenue and $472 million in profits for the same quarter in 2006.

The $818 million quarterly profit translates to a profit of 54 cents per diluted share, with year-over-year net profits and revenues up 73 and 24 percent, respectively. Gross margins, which many analysts see as critical to Apple, rose to 36.9 percent, up from 30.3 in the year-ago quarter.

This handily beats the consensus prediction from Reuters Estimates, which had called for revenue of $5.29 billion and quarterly net profits of $644.4 million.

The strong results were lead by record sales of Macintosh computers, which were up 33 percent to 1.764 million units in Q3 2007 over the year-ago quarter.

In addition, iPod sales rose 21 percent over the year-ago quarter, to 9.815 million units. This growth came despite new competition in the digital music player space from Microsoft and Apple itself, with the announcement in January of the iPhone.

Other music revenue grew 33 percent year over year, including revenue from the iTunes store, said Peter Oppenheimer, chief financial officer of the Cupertino, Calif., company.

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Investors slammed Apples stock July 24 after reports that iPhone partner AT&T recorded only 146,000 activations of the device in the first two days of its release, disappointing market analysts who had predicted faster sales and activations.

During the presentation, Oppenheimer admitted to "some activation problems" during the iPhone launch, and apologized to customers.

Company officials didnt mention iPhone sales numbers during Apples initial quarterly results presentation. But a company data sheet distributed with the quarterly results listed sales of 270,000 "iPhones and Apple-branded and third-party iPhone accessories."

The company also posted a comment from Jobs on its Web site saying the "iPhone is off to a great start—we hope to sell our 1-millionth iPhone by the end of its first full quarter of sales—and our new product pipeline is very strong."

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The iPhone became available for sale June 29, which gave it only two days to make an impact in this financial quarter.

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