Apple profit soars 73%

Strong sales of Macs and iPods helped Apple increase quarterly profit by 73 percent, beating Wall Street forecasts and alleviating some concerns about early sales of the iPhone.

Profit in the company's third quarter rose to $818 million from $472 million a year earlier. Analysts had forecast on average a profit of $645.6 million, according to Thomson Financial.

Investors were spooked Tuesday when AT&T, which provides service for the phone, said it had activated just 146,000 iPhones in the day and a half between the cellphone's U.S. introduction and the end of the quarter, far fewer than some analysts had expected. That sent Apple's stock down 6 percent.

But Apple executives said Wednesday that the company actually sold 270,000 iPhones in that period, a number that seemed to calm investors' fears. The executives said Apple expected to sell one million iPhones this quarter and reiterated its goal of selling 10 million phones by the end of 2008. The company plans to release the phone in Europe in the fourth quarter.

"Our view is the starting gun has been fired, and we're off to a great start," Timothy Cook, chief operating officer, said. "Our primary focus is not on initial sales but on creating a third business for Apple."

By comparison, Apple executives said, it was nearly two years before Apple sold its one millionth iPod music player.

The company shipped 1.76 million Mac personal computers during the latest quarter, 33 percent more than a year earlier, and 9.82 million iPods, a 21 percent increase. Those increases helped lift revenue to $5.41 billion from $4.37 billion last year, beating Apple's own projection of $5.1 billion.

"The upside was clearly the health of the Mac business," said A.C. Sacconaghi, an analyst with Sanford C. Bernstein. "Apple's in a really attractive position, where the Mac's component prices are falling but they're able to charge the same prices."

Qualcomm posted a 24 percent increase in quarterly profit and raised its annual earnings and profit estimates on strong demand for cellphones that surf the Internet and download music and video, The Associated Press reported from San Diego.

The company earned $798 million in its third quarter, which ended July 1, up from $643 million and beating most analysts' forecasts. Sales rose 19 percent to $2.33 billion.

Qualcomm, based in San Diego, is the second-largest supplier of chips for mobile phones after Texas Instruments.

The company also makes money from licensing its patented technology but is embroiled in several high-stakes trade and legal disputes. In June, the U.S. International Trade Commission banned imports of many new phones that carry Qualcomm chips after finding that the company infringed on a patent that protected the technology of its rival Broadcom to conserve battery power.

Symantec, the maker of Norton security software, reported a higher-than-expected quarterly profit on strong sales of backup software and cost cuts, Reuters reported from Boston.

While net profit in its quarter through June fell 5 percent from a year earlier to $95.2 million, profit excluding special items was equivalent to 29 cents a share, topping the 20 cents a share analysts had on average forecast.

Revenue rose to $1.4 billion from $1.26 billion.

Analysts said the results showed that the leading maker of security software was succeeding on two fronts: cutting costs and resolving issues that have hurt sales in its various business units over the past few years.

"In this one quarter you had all the businesses show some positive progress," said Todd Weller, an analyst with Stifel, Nicolaus.

The company attributed the better-than-expected results partly to about $200 million worth of sales of Symantec's Backup Exec software.

James Beer, the chief financial officer, said that the company was ahead of schedule in implementing a restructuring plan.

source:iht.com