Apple juiced by iPod sales

Co. profit up 27%, beats estimates

NEW YORK — Apple surprised Wall Street on Wednesday by revealing that iPod sales surged over the summer.

IPod numbers are closely watched by the entertainment biz.

Sales for the fiscal fourth quarter, ended in September, were 8.73 million, up about 35% from a year earlier.

Number clobbered the expectations of many analysts, some of whom had predicted iPod sales would inch up from about 6.5 million last year to about 7 million this year.

Disclosure is good news for the entertainment biz, particularly substantial providers of content to iTunes, such as ABC.

Entertainment execs have been hopeful the iPod would remain a popular item, fueling the sale of TV shows and, ultimately, movie content.

Slowdown didn’t materialize in part because the company has been adept at adding bells and whistles that makes even iPod owners snatch up new devices. Latest version’s new features include more searchability as well as added style options.

Future iterations of the video iPod are expected to have bigger screens more suitable to playing movies, which Apple and topper Steve Jobs are prepping to sell.

Hollywood is also on tenterhooks over the upcoming release of iTV, and now it has dates it can mark on its calendar: the first quarter of 2007, when Apple said it will begin shipping the product.

ITV, which will allow movies and shows to move wirelessly between computers and televisions, could give a jumpstart to the stagnant movie-downloading biz.

Company did not break out sales between the music iPod and video iPod.

Wall Street loved the iPod news as well as the general results: Earnings announcement, made after the market’s close, prompted investors to send up the stock nearly $3, or 4%, in after-hours trading.

Overall, company’s revenue was up 32% to $4.84 billion, and net income was up 27% to $546 million. Sales of more than 1.6 million Macs in the period — and a revenue jump in the category of 37% — also drove gains.

Quarter continues a hot streak for Apple, which in the previous quarter goosed revenue 24% and net income 48%.

Still, Apple is in a vulnerable spot as Microsoft readies iPod competitor Zune.

And the video iPod did take a small hit when Apple acknowledged the device was struck by a virus that could lead to glitches when synched with Windows; company said fewer than 1% of its devices are affected.

Apple remained mostly mum about the stock options backdating scandal that’s swept up the tech giant along with many other firms.

It did acknowledge 15 instances of backdating and said a restatement of past earnings is likely.

Earlier this month, Jobs apologized for the instances of backdating and said they were “completely out of character for Apple.”

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