Apple defied analysts' predictions yesterday, announcing a $40 million profit for its second quarter.

The profit translates into 12 cents per share, down from the 64 cents the company posted in the same quarter last year. Analysts' predictions ranged from between 1.1 cents and seven cents per share. On the After Hours Market, Apple shares closed at at $26.18, rising from $22.79.

Revenue for the quarter, which ended on March 31, was $1.43 billion, down 26 per cent year-on-year, Apple said in a statement.

Including non-recurring items, Apple posted income of $43 million and earnings of $0.12 per diluted share. Non-recurring items were not included in the profit equation. These included an after-tax gain of $89 million from the sale of 23 million share of ARM Holdings, and an after-tax charge of $86 million to account for equity investments.

PowerBook sales rocket Apple shipped 751,000 Macs during the quarter. This included sales of 115,000 Titanium PowerBook G4s – a 173 per cent increase in PowerBook sales. Blue Dalmation iMacs account for approximately 28 per cent of total iMac sales, with 48 per cent of Apple's sales coming from its international markets.

"Apple returned to profitability in this tough economic climate by launching several new products," CEO Steve Jobs said. Apple launched the Titanium PowerBook G4 and Mac OS X, among other products during the quarter.

Fred Anderson, Apple's chief financial officer, said: "We feel very good about delivering solid profitability, while reaching our goal of four weeks of channel inventory ahead of schedule.

"We now expect to generate $3.2 to $3.4 billion in revenues in the second half of the fiscal year. We are targeting sequential improvements in both revenues and profits in the June and September quarters."