Apple turns $135 million profit in Q2

Bolstered by strong sales of its iMac and Power Macintosh G3 computers, Apple Computer last week posted better-than-expected second-quarter earnings of $US135 million, or 84 cents per diluted share.

The quarter's total revenue included $US42 million derived from the $US50 million sale of two million shares of ARM Holdings PLC, and expenses of $US8 million spent on tightening manufacturing operations, the company said. Without these non-recurring items, the company's earnings would have been $US93 million, or 60 cents per diluted share, still above expectations.

A median estimate of 18 analysts polled by First Call had predicted Apple earnings for the quarter ending March 27 would be 57 cents per share.

Revenues for the quarter were $US1.53 billion, up from $US1.4 billion from the same period a year ago. International sales accounted for 50 per cent of the quarterly revenue.

A year ago, the company posted earnings of $US55 million, or 38 cents per share, for the second quarter.

Sales of iMac and Power Macintosh G3 computers drove much of the earnings in the quarter, said Steve Jobs, Apple's interim chief executive officer. Sales of the computers jumped 27 per cent from last year's second quarter.

In addition to healthy sales, increased efficiency in operating procedures also helped the company, said Fred Anderson, Apple's chief financial officer. The company presently has $US2.9 billion in cash and short-term investments, he said.

Customer loyalty remains a strong factor in maintaining sales, even in the face of an uncertain market which has other companies like Compaq experiencing less-than-expected revenues, said one analyst.

"Apple continues to have brand approval and sales to their existing customer base and they're getting some new converts," said Roger Kay, an analyst with International Data Corp (IDC) in Framingham, Massachusetts. "They continue to have a viable niche."http://www.apple.com/

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