Apple Inc. rose to a record in Nasdaq trading after profit almost doubled last quarter and Chief Executive Officer Steve Jobs tantalized investors with the promise of “extraordinary” new products. The doubling of the stock in the past year already has made Apple the third-most valuable company in the U.S. and today’s gains bring it closer to the No. 2, rival Microsoft Corp. Apple jumped 6 percent on the Nasdaq Stock Market.
Sales this quarter will be as high as $13.4 billion, Apple said yesterday, topping the $13 billion anticipated by analysts. The forecast came after a 90 percent surge in second-quarter profit on demand for the iPhone and Macintosh personal computer. Jobs said the results added up to the best non-holiday quarter in Apple’s history.
“It’s a huge beat, this is a tremendous beat,” said Bill Kreher, an analyst with Edward Jones & Co. in St. Louis. He advises investors to buy the shares, which he doesn’t own. “Apple is demonstrating they are clearly king of the mountain in technology land.”
Sales in the coming months are likely to get a boost from the iPad, a tablet computer that went on sale April 3 in the U.S., and new gadgets that may include an updated iPhone, analysts said.
The shares of Cupertino, California-based Apple rose $14.63 to $259.22 at 4 p.m. New York time, boosting the company’s market value by more than $13 billion to $235 billion. Microsoft’s value today is $274.8 billion and Exxon Mobil Corp.’s $325.4 billion.
At least seven analysts raised price estimates for Apple after the earnings announcement, including Doug Reid of Thomas Weisel Partners LLC, who boosted his target to $320 from $300.
Net income in the second quarter, which ended March 27, rose to $3.07 billion, or $3.33 a share, from $1.62 billion, or $1.79, a year earlier. Sales gained 49 percent to $13.5 billion. That surpassed the expectations of analysts, who predicted profit of $2.46 a share on sales of $12 billion.
Apple said iPhone shipments doubled to 8.75 million. The company also sold 2.94 million Macs and 10.9 million iPods. Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. in New York, had estimated shipments of 7.3 million iPhones, 3.1 million Macs and 9.9 million iPods. Sacconaghi, who rates the stock “outperform,” is the top-ranked computer analyst by Institutional Investor magazine.
More new devices are on the way, said Jobs, 55.
“We have several more extraordinary products in the pipeline for this year,” he said in a statement.
The jump in iPhone shipments was helped by the addition of eight carriers offering the smartphone in key markets in Europe and Asia, Chief Operating Officer Tim Cook said on a call with analysts yesterday. He also pointed to the success of the iPhone in China, disclosing for the first time that sales there had more than doubled in the past six months to almost $1.3 billion. Apple began offering the iPhone in China in October.
Apple declined to answer analysts’ questions on what new products are planned. Cook said only that sales of the iPhone are driven, in part, by “new hardware and new products.”
One coming device may be an upgraded iteration of the iPhone and an improved version of Apple TV, a product that lets Mac and PC users take content off the Internet and their computers and display it on widescreen TVs.
“We already know about the new iPhone,” said Michael Obuchowski, managing director at First Empire Asset Management Inc. in Hauppauge, New York, which oversees $3.8 billion in assets including Apple shares. “I imagine that there will be a complete revision of Apple TV that will both make it competitive and will allow users to share media on other devices -- iPhones, iPads and iPods.”
Technology blog Gizmodo.com said this week it obtained a prototype of the new iPhone after an Apple engineer left it at bar. Gizmodo said the device, which was disguised as the current iPhone 3GS model, has a front-facing camera, metallic rim and boxier design. It also has a camera flash, higher-resolution screen and larger battery, the blog said.
The blog returned the device after receiving an April 19 request from Apple’s general counsel that Gizmodo give it back.
Apple TV remains a “hobby” for the company because the market of opportunity for the device remains small, Cook said yesterday.
Still, Gene Munster, an analyst at Piper Jaffray & Co. in Minneapolis, also predicts Apple will offer television-related products. “For the next two years or so it’s going to be the iPhone and iPad, but in terms of big picture pockets they aren’t tapping, it’s television,” said Munster, who predicts Apple will also release a new iPhone this summer.
Cook said the company was “shocked” at early demand for the iPad, a mobile gadget for surfing the Web, playing music, watching video and reading electronics books.
Apple said it sold more than 500,000 iPads in the first week after its U.S. debut. Saying orders have been “far higher” than the company predicted, Apple delayed the device’s international release by a month to the end of May. Demand will outpace supply for several weeks, the company said.
The company may sell as many as 900,000 iPads this quarter, said Shaw Wu, an analyst with Kaufman Bros. in San Francisco. He recommends buying the shares and doesn’t own any.
“Unemployment is still high, and they posted their strongest March quarter, second strongest in its history,” Wu said about yesterday’s results. “You have to wonder how well they’d do in a better environment.”
To contact the reporter on this story: Connie Guglielmo in San Francisco at firstname.lastname@example.org.