Apple backs Jobs as profits soar

26-04-2007

by Charlie Taylor

Continuing strong sales of iPods and Macs helped Apple record a colossal 88 percent rise in profits during its second fiscal quarter.

The firm said on Wednesday net income for the quarter reached USD770 million, or USD0.87 per share, compared to USD410 million, or USD0.47 per share, for the same three-month period last year.

Revenues totalled USD5.26 billion versus USD4.36 billion in the year-ago quarter.

Gross margin was 35.1 percent, up from 29.8 percent last year.

The company said international sales accounted for 43 percent of its quarterly revenue.

Apple, which recently announced more than 100 million iPods have been sold worldwide, reported that it shipped 10.5 million iPods during the quarter, up 24 percent compared to the same quarter last year. In addition, 1.5 million Macs were shipped, a 36 percent rise over the year-ago quarter.

"The Mac is clearly gaining market share, with sales growing 36 percent -- more than three times the industry growth rate," said Steve Jobs, Apple's chief executive. "We're very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline."

Looking ahead, the firm said it expects revenues during its third quarter to total USD5.1 billion with earnings per diluted share of USD0.66.

Before revealing its financial results, Apple's board of directors came out in support of Steve Jobs following recent allegations levelled against him by the company's former chief financial officer, Fred Anderson.

In a statement released this week, Anderson, who resigned from Apple's board in October following an investigation into the firm's stock option practices, claimed Jobs was warned about the accounting implications of backdating stock options for top executives at the company in 2001, raising fresh doubts about the role Jobs may have played in the scandal.

However, ahead of announcing its latest financial performance, the company released its own statement backing Jobs.

"We are not going to enter into a public debate with Fred Anderson or his lawyer. Steve Jobs cooperated fully with Apple's independent investigation and with the government's investigation of stock option grants at Apple.

"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. We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple."

On Tuesday, Anderson paid USD3.5 million in fines and penalties to the Securities and Exchange Commission (SEC) in an agreed settlement without liability in relation to the stock options scandal.