Apple Computers continued on its path to recovery yesterday, surpassing Wall Street expectations with its second successive profitable quarter.

The company, which employs 1,700 at its European manufacturing headquarters in Cork, said it had a net income for the three months to the end of March of $55 million (£39 million).

Although the company would not release either turnover or profit figures for its Irish operations, Apple said international sales accounted for 50 per cent of total revenues. In previous years, the firm has said the Cork plant generates up to a quarter of all business from Macintosh products.

In January, Apple said it was laying off 125 workers at a Dublin subsidiary, Claris Ireland. The move formed part of a worldwide cost-cutting plan by the company's co-founder and interim chief executive, Mr Steve Jobs.

Those cutbacks, along with strong sales of its G3 PowerMac computers, had helped return the figures to the black, Apple said.

The second quarter income of $55 million compares with a loss of $708 million one year earlier. Revenues for the quarter were $1.4 billion, down from $1.6 billion in the year-ago quarter.

The profits, at 38 cents a share, took analysts by surprise. The second quarter is also typically Apple's slowest, and many had predicted earnings of around 16 cents a share.

"Apple had a great quarter, no question about it," Mr Jobs said. "We are very pleased with the strong demand for our Power Macintosh G3 computers, which accounted for 51 per cent of all units sold."

Apple's gross profit margins also were the best the company has seen in two years, at 25 per cent of revenues, the firm said. This compares with gross profit revenues of 19 per cent a year ago.

Unit shipments were 650,000, an 8 per cent increase from the year-ago quarter and the first time the company has registered such growth since December, 1996. The firm said its revenue decline was due to lower average selling prices and its exit from several imaging and printing products. Apple's chief financial officer, Mr Fred Anderson, said he expected third quarter revenues to be flat compared with the second quarter but predicted fourth quarter revenues would be up from the third quarter.

But he said future revenue growth would be tempered by Apple's transition to new products, such as new notebooks and a new low-cost consumer product, which would be introduced by the December quarter.