Apple profit rises on strong Mac, iPod sales

By Scott Hillis

SAN FRANCISCO (Reuters) - Apple Inc (AAPL.O: Quote, Profile, Research) on Wednesday posted a 36 percent rise in quarterly profit, helped by strong sales of Macintosh computers and iPod players, but its profit margin and cautious outlook disappointed investors.

Shares of Apple fell 1 percent after the company, known for conservative financial forecasts, gave a profit outlook for its current quarter that was below Wall Street estimates.

Chief Financial Officer Peter Oppenheimer also told Reuters he expected gross margin in the June quarter to be similar to the March quarter's 32.9 percent, which was down from 35.1 percent a year ago.

"It looks like the Macs were good, the iPods were flat and the iPhones were OK," said Robert Stimpson, portfolio manager at Oak Associates, which owns Apple shares.

"It looks like the third-quarter earnings view is a little below the Street. With the stock up 41 percent since the February low, it is going to take a lot of good news to propel the stock higher."

Apple said net profit for its fiscal second quarter ended in March rose to $1.05 billion, or $1.16 per share, from $770 million, or 87 cents per share, a year ago. Revenue grew by 43 percent to $7.51 billion.

The results beat the average analyst forecasts for revenue of $6.95 billion and earnings per share of $1.07, according to Reuters Estimates.

"It was a strong quarter in terms of Mac shipments and iPods," said Shannon Cross, analyst at Cross Research. "IPods, which had been a concern, were above Street expectations and that should hold back some who were speculating that iPod was saturated."