U.S. News

Creative Technology's Profit Jumps on Apple Payment


Creative Technology, maker of Nomad and Zen digital music players, reported a more-than-tenfold rise in net profit on a one-time license payment from Apple to settle patent litigation over the iPod.

Creative posted on Tuesday a net profit of $92.1 million, or $1.10 per share, for the fiscal second quarter ended December, compared with $8.2 million, or 10 cents per share, in the year-earlier quarter, which included an investment gain of $6.9 million. Revenues rose to $424.4 million from $390.8 million.

The paid-up license from Apple contributed $82 million, or 98 cents per share, to second-quarter net income.

Excluding the Apple payment and investment gains, net income rose to $9.9 million from $1.3 million a year earlier.

Singapore-based Creative also competes with South Korea's Samsung Electronics, which produces Yepp players, Japan's Sony, and South Korea's Reigncom, whose iRiver players have won good reviews. Mobile handset makers Nokia and Motorola are also adding digital-music-playing functions to high-end phones.

Last October, Creative said it expected to return to profit in the second quarter after three quarters in the red.