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Apple Quadruples Q4 Profit

Apple Computer has published the financial results for its fourth fiscal quarter of 2005, and… well, there’s no other way to put this. Somewhere in Cupertino, someone is rolling around in a big pile of money and laughing like a comic book villain on nitrous oxide. Apple earned $430 million on $3.68 billion in revenue, marking the highest quarterly revenue and profit in the company’s 29-year history. Compared to the same quarter a year ago, Apple quadrupled its profit.

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For the quarter, Apple’s operating margin was a healthy 28.1 percent (up from 27 percent a year ago), and 40 percent of the company’s revenue came from outside the United States. The quarter also concludes a great year for the company, marked by 68 percent revenue growth and a 384 percent increase in net profit year-over-year. Apple pulled in $13.93 billion during fiscal 2005, from which it squeezed $1.335 billion in profit.

What’s fueling Apple’s windfall? In a word, iPods. To be sure, the company managed to shuffle 1.2 million Macintosh computers out the door (split nearly evenly between desktop and portables, with 602,000 and 634,000 Macs of each type sold, respectively), a highly respectable increase of 48 percent year-over-year. And the company generated $590 million in revenue from things like the peripherals and non-computer hardware, software like the iLife application bundle and Mac OS X, and .Mac memberships, etc.

However, these traditional activities of Apple, a computer company, are being rapidly overshadowed by its music business, which now accounts for over 40 percent of the company’s revenue. Apple shipped 6.45 million iPods during the last three months and pulled in another $265 million from other music offerings like the iTunes Music Store. (And it’s a good bet that some of the money accounted for separately as hardware and peripherals are, in fact, iPod-related: speakers, lanyards, batteries, adapters… and, fer gosh sake, socks.)

Does Apple think the ball is going to stop rolling? Nope: for its first quarter of 2006 – which includes the end-of-year holiday buying season – Apple is anticipating revenues of around $4.7 billion.

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