Apple channels iPods for record Q1 run

Pod-au-Plenty

Holiday shoppers did their part for Apple during the first quarter, carrying the company to record revenue.

Apple sold $7.1bn worth of goods in the first quarter compared to $5.7bn in the same period last year. Its profit came in at $1.0bn – well ahead of last year's $565m profit. As expected, strong iPod sales drove the gains.

"We are pleased to report stellar financial results and another record quarter for Apple," said the company's CFO Peter Oppenheimer.

Apple shipped a whopping 21 million iPod units during the quarter, marking a 50 per cent rise in sales. It also notched 1.6m Mac shipments – a 28 per cent increase.

Investors seemed unmoved by Apple's iPod-based run. They sent shares higher 3.3 per cent in the after-hours markets on word of the first quarter earnings and then later pushed shares back down 1 per cent - at the time of this report.

Even with all the good news, one namby-pamby financial analyst couldn't help himself from questioning Apple on its stock options probe, darkening the mood of the post earnings conference call with management. Executives continued to maintain that all is fine with this whole options business, while some say CEO Steve should be on his way out.

But don't let the naysayers distract you. Apple really is as perfect as it looks.

The company kicked up notebook sales 79 per cent during the first quarter to $1.46bn and boosted desktop sales by 5 per cent to $955m. Those ads with the likable PC chap and the Mac tool appear to be working.

And all hail the iPod, which contributed to $3.4bn in device sales and another $634m in music products and services, $297m in peripherals and $347m in software and services.

Apple plans on a decent second quarter as well with revenue forecast to come in between $4.8bn and $4.9bn. One of the big boosters to this forecast is a "favorable" component market.

The fourth quarter "was a great time to be a buyer," according to Apple's CFO, who expects the "same" conditions to hold in calendar 2007. LCD prices and flash memory prices are to Apple's liking, and DRAM pricing looks tolerable.®

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