Apple posts $472m profit

Apple today posted revenue of $4.37 billion and a net quarterly profit of $472 million, or $.54 per diluted share for its fiscal 2006 third quarter ended July 1st, 2006 -- the second highest quarterly sales and earnings for the company. The results -- which are to be discussed at 5:00 p.m. EDT via a conference call -- are just shy of analysts' estimates of $4.4 billion in revenue, but ahead of profit estimates of 44 cents. The results compare to revenue of $3.52 billion and a net profit of $320 million, or $.37 per diluted share, in the year-ago quarter. Gross margin was 30.3 percent, up from 29.7 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter's revenue. Apple shipped 1,327,000 Macs and 8,111,000 iPods during the quarter, representing a 12 percent growth in Macs and 32 percent growth in iPods over the year-ago quarter.

"We're thrilled with the growth of our Mac business, and especially that over 75 percent of the Macs sold during the quarter used Intel processors. This is the smoothest and most successful transition that any of us have ever experienced," said Steve Jobs, Apple's CEO. "In addition, iPod continued to earn a US market share of over 75 percent and we are extremely excited about future iPod products in our pipeline."

"We're very pleased to report the second highest quarterly sales and earnings in Apple's history, resulting in year-over-year revenue growth of 24 percent and earnings growth of 48 percent," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth quarter of fiscal 2006, we expect revenue of about $4.5 to $4.6 billion. We expect GAAP earnings per diluted share of about $.46 to $.48, including an estimated $.03 per share expense impact from non-cash stock-based compensation, translating to non-GAAP EPS of about $.49 to $.51."

Apple also announced that a special committee of the company's outside directors has hired an independent counsel to perform an investigation on the previously announced irregularities related to the issuance of certain stock option grants made between 1997 and 2001, saying that it expects no material change from the already discovered irregularities to its financial results for the June quarter; however, the company said that any additional discoveries may affect the releases.

"At this time, based upon the irregularities identified to date, management does not anticipate any material adjustment to the financial results included in this earnings release. However, if additional irregularities are identified by the independent investigation, a material adjustment to the financial information could be required," the company said in a statement.

by MacNN Staff