iPod sales keep on swelling Apple's coffers

Fuelled by continued strong iPod sales, Apple reported fiscal third-quarter profits and sales that easily topped expectations.

The Mac maker said it made a profit of $320m, or 37 cents per share, on revenue of $3.52bn for the three months ended 30 June. In the same quarter a year ago, Apple made a profit of $61m, or eight cents per share, on revenue of $2.08bn. Analysts had been expecting the company to report profits of 31 cents per share, with revenue of $3.34bn, according to First Call.

Apple's profits also far outpaced its own predictions. When it reported its last quarterly results in April, Apple forecast it would make profits of 28 cents per share on revenue of $3.25bn.

The company sold 1.18 million Macintoshes in the third quarter and 6.16 million iPods.

Mac sales were up 10 per cent from the prior quarter and 35 per cent from a year earlier. Unit sales of the iPod were up six-fold from a year earlier and 16 per cent from the prior quarter.

Revenue growth from the iPod was more modest as prices fell and Apple added the Shuffle to its mix, with sales up 343 per cent from a year ago and nine per cent from the prior quarter. Apple also saw a boost as Tiger went on sale during the quarter, sending software sales up 44 per cent from the prior quarter and 64 per cent from a year earlier.

CEO Steve Jobs said in a statement: "We are delighted to report Apple's best quarter ever in both revenue and earnings. The launch of Mac OS X Tiger has been a tremendous success, and we have more amazing new products in the pipeline."

However, the company's prediction for the coming quarter was slightly less than some analysts had expected. The company said to expect revenue of $3.5bn and profits per share of 32 cents. Analysts had been expecting profits of 33 cents per share and revenue of $3.59bn, according to the average estimate compiled by First Call.

Piper Jaffray analyst Gene Munster said he thought Apple was being overly cautious in its outlook.

"Apple's guidance is absurd," Munster said. "It assumes no one goes back to school this fall. This guidance defines Apple's conservative nature. Expect upside to the stated guidance."

However, Apple CFO Peter Oppenheimer said on a conference call that the outlook "is prudent as we learn more about the impact of the [Intel] announcement on sales." Apple announced in June it plans to start using Intel chips in Macs.

Ina Fried writes for CNET News.com