Apple results top targets, Mac sales strong

By Scott Hillis

SAN FRANCISCO (Reuters) - Apple Inc (AAPL.O) blew by analysts' estimates with a 67 percent rise in profit on Monday as the popularity of its iPhone and iPod boosted Macintosh computer sales, and its shares jumped 7 percent.

"There's no question that Mac sales are still having a halo effect from the iPod and iPhone," said Tim Bajarin, president of technology consulting company Creative Strategies.

Net profit climbed to $904 million, or $1.01 per share, in its fiscal fourth quarter, from $542 million, or 62 cents per share, a year ago. Revenue rose 29 percent to $6.22 billion.

That handily beat Wall Street's average targets of 85 cents per share in profit and $6.06 billion of revenue, according to Reuters Estimates.

Apple also benefited from falling prices of electronic components, lifting its gross profit margin to 33.6 percent. The company said it expects that to fall to 31 percent in its current quarter as prices for some parts start to rise again.

Apple also forecast first-quarter profit of $1.42 per share and revenue of $9.2 billion, ahead of the $1.40 per share and $8.7 billion that were the average Wall Street targets.

"It appears that they are expecting an extremely solid holiday shopping season and, I would guess, strength from the launch of the iPhone in Europe," said analyst Shannon Cross of Cross Research.

DEBUT QUARTER

During the quarter, Apple shipped 1.12 million units of the iPhone, which went on sale in the United States in late June. That was toward the high end of analysts' forecasts.

Some investors had hoped for even better performance from the iPhone but said sales could pick up following Apple's move last week to let users install other software on the devices.

"They have real value in the iPhone. We were a little disappointed in the sales number itself. More and more people will find the phone more useful as they add outside applications," said Nicholas Kaiser, president of Saturna Capital, which owns Apple shares in mutual funds and private accounts.

One thing Apple did not disclose was its chunk of shared revenue from AT&T Inc (T.N), the exclusive U.S. network carrier for the iPhone. Analysts have estimated the payments could amount to anywhere from $150 to $350 or more per unit over the mandatory two-year contract.

Apple also sold 2.2 million Macintosh computers in the quarter, up 34 percent from a year earlier and above Wall Street expectations of about 2 million.

The company often sees strong computer sales in its fourth quarter, which coincides with back-to-school buying. Chief Financial Officer Peter Oppenheimer said Mac sales in the first quarter could be lower sequentially because a popular school promotion boosted shipments in the fourth quarter.

IPod sales were up 17 percent from a year earlier, but at 10.2 million units, came in below most expectations. Apple rolled out new iPods at the start of its current quarter, which executives said should lead to strong holiday sales.