Mac is Apple's core in 2Q


Growth in Apple's iPod business might have disappeared, but the new-media darling still managed to best the expectations of Wall Street experts in its fiscal second quarter.

Apple said Wednesday that it sold 10.6 million iPods in the three-month period that ended March 29, just 1% more than it sold in the same frame last year. Revenue for the iPod rose 8%.

The star of the quarter was the Macintosh computer, of which Apple sold 2.3 million units, representing 51% unit growth and 54% revenue growth.

The company sold 1.7 million iPhones, and CFO Peter Oppenheimer stuck by Apple's prediction that it will sell 10 million iPhones this year, a goal analysts have doubted is achievable.

Unit sales numbers for Apple TV are kept secret, and Oppenheimer mentioned the product only briefly during a conference call Wednesday, and analysts weren't inclined to revisit the topic.

Overall, Apple posted a $1.1 billion profit, up from $770 million a year ago quarter. On a per-share basis, Apple earned $1.16 while analysts predicted just $1.07

Revenue was $7.5 billion, up from $5.3 billion last year and better than the $7 billion analysts expected.

Apple shares rose 1.7% on Wednesday to $162.89, well off of its 52-week high of $202.96 but enough to make Apple a $143 billion company, much larger than the biggest entertainment conglomerate, Disney, which sported a $59.6 billion market cap Wednesday.

Asked during the conference call whether a weak U.S. economy might dent future sales, Oppenheimer refused to speculate and instead pointed to strong growth in all parts of the world. In the U.S. only, second-quarter sales grew 40%, while international growth was 47%.

Oppenheimer boasted that sales surged 74% at Apple's 208 retail stores, where 33.7 million consumers shopped.

Citing third-party sources, Oppenheimer noted iPod's 73% share of the MP3 player market and the 85% share iTunes has on the legal-music download market. ITunes, with 50 million customers, has surpassed Wal-Mart as the nation's largest seller of music.

Apple's guidance, notoriously conservative, was to earn $1 a share in the current quarter while analysts were predicting about $1.11. Investors didn't seem to mind, though, as the stock was off just fractionally in after-hours trading Wednesday.