Creative Technology saw its revenue rise during the three months ended December 31, but net profit declined in the face of stiff competition.

One of the world's largest MP3 player makers, the company said sales grew to $390.8 million in its fiscal second quarter, up from $375.1 million during the same time a year earlier. However, its net profit declined to $8.2 million from $11.8 million, though the results did show a return to profitability after the company was hit by tough competition from Apple and a slew of new market entrants last year.

Sales of MP3 players, audio products, Web cams, and PC and MP3 speakers all rose in the final three months of 2005 compared to the same time a year earlier, pushing revenue to a five-year high, the company said. Creative was also able to reduce inventory, and it plans to continue paring its stored items this year.