Apple profit soars, iPod sales miss estimates

Apple Computer Inc on Tuesday reported a quarterly profit that quadrupled, but sales of its market-leading iPod digital music player fell short of many analyst estimates, sending shares down by 10 percent.
Apple sold 6.5 million iPods in the quarter, more than triple a year ago, but some analysts targeted sales of 8 million.
"Expectations for Apple's results were pretty high," said Jim Fisher, a fund manager at Univest Wealth Management, who owns Apple shares. "Revenue came a bit lower than expected...."
Still, the company posted record revenues and net profits for its fourth quarter and the full year. Apple has now sold more than 28 million iPods since their introduction in 2001.
"We're thrilled to have concluded the best year in Apple's history," Chief Executive Steve Jobs said.
The earnings report also comes ahead of a Wednesday Apple announcement. An iPod that plays video is widely expected to be unveiled.
Apple net income for the fiscal fourth quarter ended September 24 rose to $430 million, or 50 cents a share, from $106 million, or 13 cents a share, a year ago. Earnings included 12 cents per share in tax-related benefits.
Analysts had expected a net profit of 36 cents a share, on average. Revenue rose 56 percent to $3.68 billion, shy of analyst expectations of $3.74 billion, according to Reuters Estimates.
Apple has about a 75 percent share of the entire digital music player market, according to market research firm NPD Group. Last month, it unveiled its credit-card sized iPod nano, which replaced the iPod mini, then the best-selling iPod version.
Tim Cook, Apple's world-wide head of sales and operations, said on a conference call at least three times that demand for the nano was "staggering," but analysts said they had a hard time reconciling that with what they were seeing in their own checks and surveys in the market.
For the current, first quarter Apple said it expects net earnings per share of about 46 cents, including the expected cost of expensing options, matching Wall Street's estimate. Excluding items, Apple said it expects to earn about 49 cents per share, the company said, a penny better than the average estimate.
The company said it expects first fiscal quarter sales of $4.7 billion, better than the average estimate $4.49 billion. "We're looking for continued growth for the company," said Chief Financial Officer Peter Oppenheimer in a telephone interview, referring to the upcoming holiday sales-fuelled quarter.
Cupertino, California-based Apple sold 1.24 million desktop and notebook computers in the quarter, up 48 percent from a year ago, or triple the PC market rate, Oppenheimer said.
It sold 602,000 desktop Macs in the period, a 56 percent increase from a year ago, and 634,000 notebook PCs, a 41 percent increase from a year ago.