Apple Inc said on Wednesday quarterly profit soared 88 percent on lower component costs and sales of MacBook laptops and iPod digital media players, lifting its shares by 8 percent to above $100 for the first time.
The results, which trounced Wall Street expectations, came as Apple's board threw its support behind Chief Executive Steve Jobs, after the company's former chief financial officer linked him to the handling of backdated stock options.
The vote of confidence from directors included former US Vice President Al Gore and Google Inc CEO Eric Schmidt. Jobs, 52, co-founded Apple in 1976 and has been the driving force behind its turnaround in recent years.
Net income for the fiscal second quarter jumped to $770 million, or 87 cents per share, from $410 million, or 47 cents per share. That beat by far Apple's own forecast, which tends to be cautious, of 54 cents to 56 cents, as well as the average analyst forecast of 63 cents according to Reuters Estimates. "It blows the doors off. The big news is the Macintosh," said Barry Jaruzelski, a partner at consulting firm Booz Allen Hamilton.
Second-quarter revenue rose 21 percent to $5.26 billion, Apple said, beating the average analyst forecast of $5.17 billion, according to Reuters Estimates. Analysts were also impressed with Apple's gross margin, which rose to 35.1 percent from 29.8 percent a year ago.
But Chief Financial Officer Peter Oppenheimer told Reuters a gross margin of 35.1 percent was "not sustainable" because component costs are not expected to remain as low. Apple said this month it had sold its 100 millionth iPod in just over five years, capturing more than 70 percent of the US digital music player market. Its iTunes music store, which also sells television shows and movies, has sold more than 2.5 billion songs since it opened.
Apple said it sold 1.52 million Macintosh computers and 10.5 million iPods in the March quarter, up 36 percent and 24 percent, respectively, from the year-ago period. The Mac growth rate is more than three times the industry's, as it was in the prior quarter.
For the current quarter, Apple said it expects earnings per share of about 66 cents and revenue of about $5.1 billion. While that was lower than the Wall Street consensus of earnings of 67 cents a share on revenue of $5.47 billion, analysts were not worried as Apple typically gives conservative outlooks.
Apple said this month it was delaying the release of the next version of its Mac OS X operating system, code-named Leopard, blaming the delay on the need to divert software development resources to the iPhone, which will be launched in late June.
The iPhone is Apple's biggest foray yet into the cut-throat $145 billion consumer electronics industry and Jobs has set a goal of selling 1 million units in calendar 2008.