Fri, Jan 27, 2012 - Page 5 News List

Apple surges to record on strong earnings report

Bloomberg and AFP, New York

Apple Inc shares rose to a record on Wednesday after quarterly profit more than doubled as holiday demand for the iPhone and iPad cemented its position as the most valuable technology company.

Apple’s stock gained 6.2 percent to US$446.66 after reporting blockbuster results on Tuesday. Apple’s increase, the company’s biggest one-day rise since May 2010, made it the day’s best performer in the Standard & Poor’s 500 Index.

Apple briefly surpassed ExxonMobil as the most valuable US company after an excellent quarter, though the oil company has regained the lead at the market’s close.

ExxonMobil closed up US$0.04 at US$87.22 for a market capitalization of US$418 billion, while Apple ended the day with a market cap of about US$415 billion.

Apple first surpassed ExxonMobil in market value in August last year and the two companies have been jockeying back and forth since then.

Apple dethroned US software giant Microsoft in May 2010 to become the largest US technology company in terms of market cap.

Apple stock has risen steadily over the past few years on the release of a string of hit products starting with the iPod in 2001, followed by the iPhone in 2007 and the iPad in 2010.

Apple reported record earnings on Tuesday, driven by strong sales of the iPhone 4S, which was released a day before the Oct. 5 death of Apple’s visionary founder Steve Jobs.

Apple’s net profit more than doubled in the first quarter of fiscal 2012 to a record US$13.06 billion, while revenue soared to an all-time high of US$46.33 billion from US$26.74 billion a year ago.

Summing up the general sentiment, investment bank RBC Capital Markets spoke of “iDomination.”

Apple said it sold 37.04 million iPhones in the quarter ending Dec. 31, up 128 percent from a year ago, and 15.43 million iPads, up 111 percent.

Apple sold 5.2 million Macintosh computers in the quarter, up 26 percent, and 15.4 million iPods, down 21 percent from a year ago.

Apple also said it ended the quarter with a cash pile of US$97.6 billion, prompting Canaccord Genuity technology analyst Michael Walkley to speculate that the company might declare a dividend.

“We believe Apple is likely to announce a dividend during 2012, potentially next quarter when crossing US$100 billion in cash and cash equivalents,” Walkley said.

“We believe Apple is well-positioned for very strong 2012-13 sales and earnings growth driven by new product introductions, including the pending refresh of MacBook Air, the iPad 3 launching this spring, an LTE iPhone likely in the third quarter of 2012 and potentially Apple TV exiting 2012,” he added.

Walkley also raised his price target for Apple shares to US$650 from US$560.

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