Apple Blows Past Wall Street Earnings Forecast

The Cupertino, Calif.-based company turned in a profit of $770 million, or 87 cents per share, on sales of $5.26 billion for the quarter ended March 31. The average analyst forecast, according to Thomson Financial, was for Apple to report earnings of 64 cents per share on sales of $5.17 billion. In the year-ago quarter, Apple reported earnings of $410 million, or 47 cents per share, on revenue of $4.36 billion.

Apple said it shipped 1.5 million Macs in the second quarter, representing 36 percent year-over-year growth, and 10.5 million iPods, a 24 percent gain.

"The Mac is clearly gaining market share, with sales growing 36 percent -- more than three times the industry growth rate," Jobs said in a statement. "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."

The quarter included some fits and starts for Apple, which has been reporting strong growth in market share since it switched to the Intel processor platform in January 2006.

The company began shipping its Apple TV device after a delay of more than a week and announced that it was pushing back the release of its upcoming Mac OS X "Leopard" to October from the spring. In addition, the Securities and Exchange Commission on Tuesday said it would not bring charges against the company related to its stock-options backdating scandal, although the SEC did charge two former Apple executives in the case.

Through it all, Apple's computers sales remained brisk, and solution providers said business in the quarter received a boost from several factors, including the launch of third-party software.

Kevin Langdon, owner of Crywolf Computers, a San Diego-based Apple specialist, said Apple's decision to delay Leopard's launch had no negative impact on sales.

"We had our best first quarter in the last three or four years. We're jazzed," Langdon said, adding that sales to professional and commercial accounts were brisk.

Adobe's launch of its Creative Suite 3 software -- the first version of its flagship product optimized for Intel-based Macintosh systems -- sparked some sales, he said.

An April or May launch of Leopard may have caused some of Crywolf's customers to postpone Mac or MacBook Pro purchases from March in the first quarter until the second quarter, Langdon added.

In a conference call with financial analysts following the earnings announcement, Apple CFO Peter Oppenheimer said the period was "the best March quarter in Apple's history."

Apple's Chief Operating Officer, Tim Cook, reiterated the company's decision to delay Leopard so it could move resources to final engineering of the forthcoming iPhone. "In terms of Leopard, we are shipping the best Macs we've ever shipped before," Cook said. "The upgrade to Leopard is very simple and straightforward to do, but I'm really not very sure whether customers will delay (upgrading) or not" until the OS is publicly available, he said.