Apple profits exceed expectations

Apple reported on Tuesday profits that narrowly topped analysts' expectations, though sales fell short of what some were expecting.

Apple reported fiscal fourth-quarter profits of $430m, or 50 cents per share, on revenue of $3.68bn. That compares with profits of $106m, or 13 cents per share, on revenue of $2.35bn for the same period a year earlier.

The most recent quarter's profits included a benefit from tax-related issues that amounted to 12 cents per share. Excluding that benefit, Apple would have had profits of 38 cents per share. Sales were somewhat less than some analysts were projecting, and investors sent shares down more than 10 per cent in after-hours trading.

The profits report came on the verge of the Cupertino, California-based company's press event scheduled for Wednesday in San Jose, California, with considerable speculation about whether a video iPod might be on the way.

Apple had said in July to expect profits of 32 cents per share on revenue of $3.5bn, an outlook some analysts had said was overly cautious. As of Tuesday, the average estimate was for profits of 37 cents per share, on revenue of $3.72bn, according to First Call.

Apple said it sold 1.24 million Macs and 6.45 million iPods during the past quarter, which ended on 24 September.

That's up from both the prior quarter and the same quarter a year earlier. In the prior quarter, Apple sold 1.18 million Macs and 6.16 million iPods. In the fourth quarter of last year, Apple sold 836,000 Macs and 2.02 million iPods.

CEO Steve Jobs said in a statement: "We're thrilled to have concluded the best year in Apple's history, with 68 per cent year-over-year revenue growth and 384 per cent net profit growth.

"This is the direct result of our focus on innovation and the immense talent and creativity at Apple. We could not be more excited about the new products we're working on for 2006."

Looking ahead, Apple said to expect profits of 46 cents per share in the current quarter, including the costs of stock-based, non-cash compensation, with revenue of $4.7bn. Excluding the compensation charges, Apple said it expects per share profits of 49 cents.

According to First Call, analysts were looking for profits of 48 cents per share and revenue of $4.53bn for the quarter that ends in December.

The past quarter saw the introduction of the iPod Nano, a slim, flash-memory-based player that replaced the iPod Mini, the most popular of the iPod models.

Apple CFO Peter Oppenheimer said the company sold more than one million iPod Nanos in the 17 days following the gadget's launch last month.

Apple executive vice president Tim Cook said: "The demand for this product is staggering", adding that the company had an "enormous backlog" of orders with strong demand from all regions of the world. "I can't project when supply will meet demand," he said.

Oppenheimer also noted that more carmakers are adding iPod connection abilities, estimating that 30 per cent of new cars sold next year will be able to accommodate an iPod.

Oppenheimer said added: "The iPod economy continues to flourish."

Ina Fried writes for CNET News.com