Jobs has Apple board’s backing

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Apple board members including Al Gore, the former US vice-president, on Wednesday rose to the defence of Steve Jobs, a day after the company’s former chief financial officer claimed that he had warned Apple’s co-founder and chief executive about the accounting implications of a backdated options grant.

The endorsement by Mr Gore, who has been mooted as a potential contender for the 2008 Democratic presidential nomination, and other notables such as Eric Schmidt, Google’s chief, came as Apple seeks to bring an end to a controversy that has been swirling since June.

The board said it stood by an internal investigation that cleared Mr Jobs of any wrongdoing with regard to options backdating, even though it found he had been aware of, and in some cases recommended, favourable grant dates for stock options.

“We have complete confidence in the conclusions of Apple’s independent investigation and in Steve’s integrity and his ability to lead Apple,” the board said, echoing its earlier support for Mr Jobs.

The statement came as the maker of Macintosh computers and iPod music players reported a better-than-expected quarterly profit, driven by rising margins and growth in computer sales.

Apple’s shares rose more than 6 per cent in after-hours trading as investors reacted to the results, which were well ahead of most estimates.

The Apple board’s statement in support of Mr Jobs came a day after Fred Anderson, Apple’s former CFO, claimed he had warned Mr Jobs in 2001 about the accounting consequences of backdating stock options for top executives at the company.

His assertions, circulated through his lawyers, came after he agreed to pay $3.5m to settle civil charges brought by the Securities and Exchange Commission in the case.

Mr Anderson’s allegations were not included in a complaint filed on Monday against Mr Anderson and Nancy Heinen, Apple’s former general counsel, who has vowed to fight fraud charges brought by the SEC in the case.

The board’s rebuttal came as Apple reported an 88 per cent increase in net profit for the second quarter. Net income was $770m, or 87 cents a share, on sales of $5.26bn. That was up from a profit of $410m, or 47 cents, on sales of $4.36bn last time. “The earnings numbers are phenomenal,” said Gene Munster, an analyst at Piper Jaffray.

Apple hailed a rise in sales in Macintosh computers. “The Mac is clearly gaining market share, with sales growing 36 per cent – more than three times the industry growth rate,” said Mr Jobs.

Apple said it expected earnings of 66 cents a share in the third quarter on sales of $5.1bn.

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