IP Democracy: iPod Continues to Power Apple

Wall Street thought Apple couldn’t keep up its momentum and had lately taken to discounting the stock. But the Cupertino, CA-based computer and mobile device powerhouse proved skeptics wrong this afternoon when it released its Q3 06 earnings report (Apple’s fiscal third quarter ended on July 1).

Year-over-year revenues jumped 24% to $4.37 billion, while net income soared 48% to $472 million, or $.54/share, exceeding Apple’s own forecast of $.39 to $.43 per share, as sales of the lucrative iPod stayed strong. iPod sales increased 32% year-over-year, climbing from 6.26 million in fiscal Q3 05 to 8.1 million in Q3 06.

Apple’s Mac sales were relatively strong too, rising 12% year-over-year to 1.327 million units during the quarter, a good showing given that Apple has just gone through the difficult transition from IBM to Intel chips. Aiding the increased Mac sales was Apple’s boot camp program, introduced during the quarter, which allows newer model Macs to run Windows applications.

For the fourth fiscal quarter of 2006, Apple expects revenues of $4.5 billion to $4.6 billion and earnings of $.46 to $48 per share, not including one-time expenses. In its earnings release, Apple addressed the issue of “irregularities” related to stock option grants (some of which affected Apple co-founder and CEO Steve Jobs) and said that management doesn’t foresee making any adjustment to this earnings report based on the results of an independent investigation.

Posted by Cynthia Brumfield on July 19, 2006 5:49 PM to IP Democracy