iPod drives strong results at Apple

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Apple on Wednesday reported a bumper quarter for profits, driven by a strong increase in sales of iPod music players and Macintosh computers.

The results are likely to add to excitement surrounding the company after the unveiling of the iPhone mobile handset and the Apple TV set-top box – two products it hopes will provide added impetus to sales growth this year. The figures come as questions continue to swirl around options backdating at the company and its potential effect on Steve Jobs, Apple’s co-founder and chief executive.

Peter Oppenheimer, Apple’s chief financial officer, said “2007 is off to a tremendous start”.

Although Apple was keen to tout its success at selling iPods and Macs, it declined to shed any more light on the backdating issue . In response to an analyst’s question about federal investigations into the practice, Mr Oppenheimer would only repeat earlier statements that Apple had “voluntarily and pro-actively” provided the results of its own internal options investigation to US authorities.

Apple admitted last month that Mr Jobs had been “aware or recommended” favourable dates for some options grants but maintained that he had been unaware of the accounting implications and had not benefited directly from the practice.

Mr Oppenheimer declined to say whether Mr Jobs or other Apple executives had been contacted by US authorities, which are conducting their own investigations.

Apple sold more than 21m iPods in the first quarter, an increase of more than half over last year. Sales of Macintosh computers rose 60 per cent year-on-year, driven by strong demand for laptops.

The strong sales contributed to net profits of $1bn, or $1.14 a share, in the first quarter, on sales of $7.1bn. Apple had earnings of $565m, or 65 cents a share, on sales of $5.7bn in the same period last year.

Most Wall Street analysts had expected net earnings of 78 cents a share on sales of $6.4bn.

Shares of Apple rose 1.3 per cent to $96.31 in after-hours trading. The shares had risen from a 12-month low of $50.67 in July.

Apple said iPods accounted for 72 per cent of the portable music player market in the US in the first quarter.

It offered cautious guidance for the seasonally quieter second quarter of $4.8bn-$4.9bn in sales and earnings of 54 to 56 cents a share.

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