Apple rises to record after Mac and IPhones sales top estimates

Apple Inc. rose to a record in extended trading yesterday after fourth-quarter profit and revenue topped estimates, fueled by back-to-school orders for the iPhone, iPod and Macintosh computer. Apple climbed as much as $14.99, or 7.9 %, to $204.85 in late trading, exceeding the intraday record of $202.96 set in 2007. The shares, which have more than doubled this year, closed at $189.86 yesterday on the Nasdaq Stock Market. “I think Apple is the new Sony. An entire generation is growing up demanding Apple’s products, and nothing but Apple’s products,” said Hakim Kriout, portfolio manager for Grigsby & Associates.

Apple’s shares are trading at a level not seen since the iPhone first emerged as a hit product two years ago, when the device opened up a third major business for the company. While Apple’s growth slowed during the recession, earnings have continued to top analysts’ estimates. A faster iPhone called the 3GS debuted this year, reigniting sales. Company forecasts first-quarter revenue between $11.3 billion and $11.6 billion, Chief Financial Officer Peter Oppenheimer said. Profit will be $1.70 to $1.78 a share in the quarter, which is one of Apple’s biggest sales periods. Analysts had anticipated revenue of $11.5 billion and profit of $1.92 a share. Chief Executive Officer Steve Jobs cut iPod prices, added new models and ran a back-to-school Mac promotion to fuel sales. That helped Apple sell 7.4 million iPhones, 3.1 million Macs and 10.2 million iPods last quarter.

The iPhone is now available in more than 80 countries. It will go on sale in China, the world’s largest mobile-phone market, by Oct. 31. Apple’s gross margin, the percentage of sales remaining after taking out production costs, was 36.6 %, up from 34.7 % a year earlier. Fourth-quarter net income rose from $1.14 billion or $1.26 a share, a year earlier. “Apple is a culture, it’s a style, it’s a way of thinking,” Shaw Wu, an analyst at Kaufman Bros. in San Francisco, said. He recommends buying Apple shares. “Investors have become accepting that it’s ingrained in the company, rather than in one individual.”
 

Source: Bloomberg