Apple Reports Record 1Q Profit

A customer looks up information on an Apple's iPhone as she uses an Apple MacBook at an Apple Store in Palo Alto, Calif., Tuesday, Jan. 16, 2007. At left is an Apple iPod. Apple Inc. is expected to provide clarity on how well its products, especially the iPod player, fared during the holiday period when it reports its fiscal first-quarter earnings. (AP Photo/Paul Sakuma) (Paul Sakuma - AP)

SAN JOSE, Calif. -- With the iPod juggernaut still soaring, Apple Inc. reaped record profits during the holiday quarter and stands to remain a Wall Street darling despite issuing a second-quarter forecast that fell below analyst expectations.

"Their guidance is always conservative," Piper Jaffray analyst Gene Munster said. "It's a bunch of hoo-ha."

Apple didn't disappoint during its last quarter and easily topped analyst targets.

For the final three months of 2006, profits surged 78 percent after the company sold a record 21 million iPod players, or about 50 percent more than it did in the same period the year before.

That's an iPod sold for nearly every person in Texas. Sales of the iconic device accounted for $3.43 billion, or nearly half, of the company's total revenue for the quarter.

Apple also shipped 1.6 million Macintosh computers, up 28 percent from the year-ago holiday season.

The Mac sales growth rate was more than triple that of the overall PC industry for the period, according to market research firm IDC. Apple's share of the PC market in the U.S. also grew to 4.7 percent in the quarter, up from 3.6 percent a year ago, IDC said.

"Apple is clearly at the top of its game right now," said analyst Samir Bhavnani at Current Analysis.

During its fiscal first quarter ended Dec. 30, the Cupertino-based company said it earned $1 billion, or $1.14 per share, compared with $565 million, or 65 cents a share, a year earlier.

Revenue for the quarter hit a record, reaching $7.1 billion, up 24 percent from $5.7 billion the previous year.

Analysts, on average, were expecting earnings of 78 cents per share on sales of $6.42 billion, according to a Thomson Financial survey.

"This one was for the record books," Apple Chief Financial Officer Peter Oppenheimer said in an interview.