In the three months to December 27 -- the first quarter of its business year -- Apple made a net profit of 63 million dollars or 17 cents a share, reversing a year-earlier loss of eight million dollars or two cents a share.

Sales surged 36.3 percent to 2.01 billion dollars

"It was an outstanding quarter for Apple, with double-digit unit and revenue growth and over 730,000 iPods sold," Apple chief executive Steve Jobs said in a statement.

"We are kicking off 2004 with strong momentum, especially for Mac OS X, which is now used by almost 40 percent of our installed base, iPod and the iTunes Music Store, which has a 70 percent share of the legal music download market."

Mac OS X is the new operating system for the Macintosh personal computer. iPod is a digital music player that downloads tunes from the Internet. The iTunes Music Store offers song downloads from the Internet for 99 cents.

"We are very pleased to have exceeded our revenue and profit targets for the first quarter," chief financial officer Fred Anderson said.

"Looking ahead to the second quarter of fiscal 2004, we expect our third consecutive quarter of year-over-year double-digit growth in both revenue and earnings, with revenue of about 1.8 billion dollars and earnings per diluted share of eight to 10 cents."

SPACE.WIRE