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Mac sales up 12 percent as Apple profits soar

Quarterly iPod sales weren't as bad as some feared; Mac sales might have grown faster than overall PC market.

Apple Computer's third-quarter revenue fell a little short of expectations, but profitability was far higher than expected and Mac sales increased at a healthy clip.

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The Mac is back Chief Financial Officer Peter Oppenheimer credits strong Mac sales with Apple's soaring profits and improved sales.

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Apple for the teacher Educational customers were a key part of Apple's performance in the quarter, says Chief Operating Officer Tim Cook.

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Revenue was $4.37 billion, up 24 percent from last year's quarterly revenue of $3.52 billion. Net income was $472 million, or 54 cents per share, an improvement of 48 percent compared with last year's results of $320 million in net income and 37 cents per share. Analysts surveyed by Thomson First Call had been expecting Apple to report $4.4 billion in revenue and earn 44 cents per share.

Analysts had been worried that Apple's iPod growth had trailed off a bit in the middle of a long stretch without a significant redesign or a new feature added to the product. Apple sold 8.1 million iPods during the quarter, and Piper Jaffray analyst Gene Munster said in a research report earlier Wednesday that anything over 8 million would be a "slight positive."

Mac sales were up 12 percent compared with last year, during what was considered a poor quarter for the PC market. Apple said 75 percent of all Macs sold during the period used Intel's chips.

The outlook for the next period will probably disappoint some investors. The company predicted fourth-quarter revenue would be about $4.5 billion to $4.6 billion, less than the $4.9 billion analysts had been expecting. Apple executives will hold a conference call later Wednesday to discuss results.