Apple reported financial results far ahead of Wall Street's expectations Wednesday, and the company's board of directors defended CEO Steve Jobs' role in Apple's stock options backdating scandal.
Revenue for Apple's second quarter, which ended March 31, was US$5.26 billion, up 21 percent compared with revenue of US$4.36 billion in the same quarter last year. Profit was up substantially at US$770 million, or 87 cents per share, compared with profit of US$410 million, or 47 cents per share, last year.
Wall Street analysts surveyed by Thomson First Call had been expecting revenue of US$5.17 billion and earnings per share of 64 cents.
Before revealing its financial performance, Apple's board of directors issued a statement confirming its support for Jobs in the wake of allegations made Tuesday by Fred Anderson, the former chief financial officer at Apple.
Anderson issued a press release saying he warned Jobs that selecting options grant dates other than the actual date the board of directors approved the grant could force Apple to record an expense. Federal authorities and the company have conducted investigations into Apple's stock options practices and the SEC on Tuesday filed suit against Anderson and former general counsel Nancy Heinen for their roles in the options scandal.
"We are not going to enter into a public debate with Fred Anderson or his lawyer," the statement began.
Anderson has already settled with the SEC and admitted no wrongdoing, but took a parting shot at Jobs by stating that he informed Jobs of Apple's accounting duties regarding an early 2001 stock option grant that was not properly recorded. Apple restated earnings in December to correct this particular issue--which arose when Apple assigned a January 17, 2001, grant date to options awards that weren't formally approved until February--as well as other problems with options reporting.
"Steve Jobs cooperated fully with Apple's independent investigation and with the government's investigation of stock options grants at Apple. The SEC investigated the matter thoroughly and its complaint speaks for itself, in terms of what it says, what it does not say, who it charges, and who it does not charge. We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple," the rest of the statement read. It was attributed to Bill Campbell, Millard Drexler, Albert Gore Jr., Arthur Levinson, Eric Schmidt and Jerry York, Apple's directors other than Jobs, who is the chairman of the board.
Apple is scheduled to hold a conference call at 2 p.m. PDT to discuss the results. Executives will likely steer clear of questions about Jobs and the stock options mess, probably preferring to focus on sales of Macs and iPods during the quarter. Mac shipments were up 36 percent to 1.5 million units, and iPod sales rose 24 percent to 10.5 million compared with the previous year.
Apple's stock soared in after-hours trading following the release of the numbers, jumping 7.8 percent, or US$7.44, to US$102.79 ahead of the conference call.
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