Apple's Big Mac Attack

Apple reported Monday that strong sales of Macs and iPods sent its fiscal third-quarter earnings up 31.05% over the year-ago period, as the company hustled to keep up with demand for the latest version of its iPhone.



Apple's Mac clawed its way to third place in the U.S. PC market, thanks to a surge in year-over-year Mac sales, according to figures market tracker Gartner. Apple reported that sales of Macintosh computers jumped 41% to 2.5 million units during the quarter. IPod unit sales grew 12% to 11 million units. The strong showing locked in another solid quarter for Apple, even as it readied the latest version of its iPhone, the iPhone 3G, for launch July 11.

Apple reported net income of $1.07 billion, or $1.19 per share, on sales of $7.5 billion for its fiscal third quarter, compared with net income of $818 million, or 92 cents per share, on sales of $5.4 billion for the same period a year ago. The results were 11 cents above the consensus estimate of $1.08 per share reported by Thomson Financial.



Apple sought to keep expectations in check for its current quarter, however, predicting earnings per share of roughly $1 on sales of $7.8 billion for its fiscal fourth quarter. Apple Chief Financial Officer Peter Oppenheimer has a habit of trying to deflate expectations.

"We believe Apple will likely continue its tradition of conservative quarters," American Technology Research analyst Shaw Wu wrote in a note to investors last week.



The real question: Can the secretive company keep up with demand for the new 3G iPhone over the months to come, and does Apple chief Steve Jobs have any surprise product launches in store this quarter? Apple said last week that it sold its one-millionth iPhone 3G by Sunday, just three days after its launch July 11.



But while Oppenheimer may try to downplay financial expectations, he can't help but occasionally tip off investors to new products. While he strives to say as little as possible about upcoming products, it can be impossible for him to avoid dropping hints about upcoming "product shifts" when discussing Apple's prospects with investors (see "Apple Tips Its Hand").

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