iPod, Mac sales push Apple earnings past expectations

Spurred on by another quarter of strong Mac and iPod sales, Apple Computer reported on Wednesday earnings that surged past Wall Street estimates.

The Mac maker said it earned $290m, or 34 cents per share, on sales of $3.24bn in the three months to 26 March. In the same quarter a year ago, Apple earned just $46m, or 6 cents per share, on revenue of $1.91bn.

"Apple is firing on all cylinders, and we have some incredible new products in the pipeline for the coming year," CEO Steve Jobs said in a statement.

Analysts had been expecting the company to report earnings of 24 cents per share, on revenue of $3.2bn, and ahead of the company's own forecast. In January, Apple had predicted sales would be about $2.9bn, with earnings of 20 cents per share, adjusted for a February stock split.

The company said it sold 5.3 million iPods and 1.07 million Macintosh PCs. During the prior quarter, which included the holiday selling season, Apple sold 4.5 million iPods and just over 1 million Macs. Compared with a year ago, Mac sales are up by nearly 40 per cent and iPod sales are up five-fold.

Apple also offered its forecast for the current quarter, which ends in June. The company said it expects to report 28 cents per share in earnings, with revenue of $3.25bn. Analysts had been looking for earnings of 24 cents per share, with revenue of $3.2bn.

Apple should get a boost from Mac OS X 10.4 Tiger. The company said Tuesday that the $129 operating system upgrade will go on sale on 29 April.

Although Apple's unit sales of the iPod increased by 16 per cent from last quarter's 4.6 million, the company's iPod revenue dropped by 16 per cent, as Apple added the lower-cost iPod Shuffle to its mix.

On the Mac side, the company sold $483m worth of iMacs, eMacs and Mac Minis, down from $620m in the December quarter, but more than double the sales from the same period last year. The iBook laptop generated $278m in revenue, down 6 per cent from December but up 25 per cent from a year earlier. Power Mac sales of $320m were down by 16 per cent from the December quarter and 8 per cent from a year ago. PowerBook sales of $413m were up by 35 per cent from the December quarter and 23 per cent from a year ago.

Apple also said it got $216m in sales from "other music products", which include both songs from the iTunes Music Store as well as add-on hardware and services for the iPod. The company reported $177m in such revenue for December and $60m a year ago. Peripherals and other hardware, including things like displays, keyboards and mice, totaled $280m while software and other products accounted for $239m.

Ina Fried writes for CNET News.com