Apple has been offloading many of its investments, the company's Form 10Q quarterly statement reveals.

The statement, released yesterday, shows Apple has sold 278,000 shares of ARM stock for net proceeds of about $295,000, as well as selling 3.96 million EarthLink shares for $23 million – a $2 million profit. However, Apple retains $14 million of shares in Akamai.

Apple made an operating profit in the just-gone third quarter, but the report shows it expects to see a net decline in income of around $10 million, due to lower interest-yields on its investment portfolio.

The company continues to expect net sales to increase by a "high single-digit" in its fourth quarter, but predicts a slow-down in sales of Mac OS X 10.2, as customers wait for the 10.3 Panther upgrade. It also expects margins to be affected by higher manufacturing costs for its new Power Mac G5s.

As the political situation in the Far East becomes tense, Apple warns its customers: "Manufacture of many of the components used in PowerBooks, iBooks and iPod is performed by third-party vendors in Taiwan.

"If for any reason manufacturing or logistics in any of these locations is disrupted by regional economic, business, environmental, medical, political or military conditions or events, the company's results of operations and financial condition could be adversely affected."