Apple net income tripled by iPod

APPLE Computer yesterday posted quarterly net income that had more than tripled, fueled by surging sales of its market-leading iPod digital music players.

For its third quarter ended June 26, Cupertino, California-based Apple said it had net income of $61 million, or 16 cents a share, up from $19 million, or 5 cents a share, in the third quarter last year.

Shares in the computer giant went up yesterday ahead of its quarterly earnings report,.

In midday trading, the Cupertino, California-based computer maker’s stock traded higher by 65 cents, or just more than 2%, at $29.87 - its best level for the session so far. The shares opened below the previous session’s close, but quickly reversed those losses.

Analysts, on average, had predicted the company’s fiscal third-quarter earnings to triple from a year ago to 15 cents a share as sales rise 26% to $1.94 billion

Prudential Equity analyst Steven Fortuna said Apple could beat Wall Street estimates by a penny a share and top his own current estimate of 14 cents per share, given the sales strength of its iPod digital music players.

“We have some degree of concern that, at current price levels, investors may be expecting material upside in the quarter and to second-half estimates despite iMac delays,” Fortuna added.

Apple has delayed the launch of the new version of its flagship iMac desktop computer until September. The delay will cause Apple to miss the back-to-school shopping season.

Recent checks showed that business is tracking roughly in line with Fortuna’s estimate calling for sales to rise 1% from the prior quarter to $1.93 billion.

At First Albany, analyst Joel Wagonfeld agreed that investors maybe set their hopes for earnings upside too high for the quarter.

“We remain positive on Apple, but believe potential upside for the third quarter is less than what some may be expecting, which may provide a more attractive entry point,” he said.

Wagonfeld expects shipments of both desktops and notebook computers to be “disappointing” for the quarter.

The analyst said Apple could report a quarter-on-quarter decline in unit shipments, compared with his forecast calling for a 3% rise in the total number of units sold.

Sales of iPods should, however, offset weakness in computer sales, according to Wagonfeld. He noted that the company faces tough sequential comparisons on iPod sales and continued component supply constraints on the Mini version of the music player.

Meanwhile, Joe Gantley, who has been chief executive of Apple Computers’ European Operations for the past six years, yesterday announced his intention to resign from the company.

Mr Gantley, who has led the company from strength to strength, said that his decision was based on his desire to pursue outside interests.

The 48-year-old father of three, declined to elaborate on what those interests were.