Apple Posts $1 Billion Holiday Profit

Apple shocked Wall Street after the closing bell on Wednesday, reporting both record revenue and profits that broke the $1 billion barrier. On top of these impressive results, the company shipped more than 21 million iPods and 1.6 million Macs, a record number for the former.

The numbers were well above estimates. An average of analysts surveyed by Reuters showed the Street was looking for profit of 77 cents per share on revenue of $6.43 billion. Instead, Revenue rose to $7.12 billion, on profits of $1 billion, or $1.14 per share.

Profits were up a staggering 78 percent year over year, and revenues up 24 percent. The number of iPods sold far exceeded even the rosiest estimates, which had been expecting 15-17 million iPods on average.

Mac sales narrowly missed records, which were set last quarter in Apple's traditionally busy back-to-school period.

We are incredibly pleased to report record quarterly revenue of over $7 billion and record earnings of $1 billion," said Steve Jobs, Apple's CEO. "We've just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone."

In a conference call with analysts Wednesday evening, Apple CFO Peter Oppenheimer disclosed that increased competition in the music player business is not hurting the iPod's market share at all.

In December, iPods had a 72 percent market share in the US according to NPD, and the device gained share in every other market where Apple offers it. iTunes now includes 4 million songs, 350 television shows, and 250 movies, he added.

Apple's retail stores have continued to grow as well, accounting for $1.1 billion in quarterly revenue. 308,000 Macintoshes were sold in stores, the company said.