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Thursday, April 22, 2010

Apple shares rocket after net income jumps 90%

The paparazzi may have moved on to Apple’s new iPad, but the iPhone is still Wall Street’s darling.Apple said on Tuesday it sold a record 8.8 million of its popular smart phones in the three months that ended 27 March, more than doubling the number sold a year ago and topping last quarter’s 8.7 million. The company’s net income shot up 90%, shattering Wall Street’s expectations.

Apple shares jumped to a new all-time high Wednesday. They rose $13.31, 5.4%, to $257.90 in early trading.“It was a monster iPhone quarter,” said Piper Jaffray analyst Gene Munster, who was astounded that a 3-year-old device could still grow at such a clip. “It’s defying the law of gravity.”

While much of the consumer electronics industry has faltered during the economic downturn, Apple has been impervious, much to the delight of investors. Shares of the company skyrocketed to an all-time high in extended trading on Tuesday.

Peter Oppenheimer, Apple’s chief financial officer, said in an interview that strong sales came from both existing and new mobile carriers. Although AT&T Inc. remains the exclusive US carrier, Apple has been selling phones through multiple carriers in other countries.

Apple’s net income and revenue were its highest ever in a non-holiday quarter, Oppenheimer said. Earnings rose to $3.1 billion, or $3.33 per share, from $1.6 billion, or $1.79 per share in the same period last year.

Revenue rose 49% to $13.5 billion from $9.1 billion in the year-ago quarter. Revenue from iPhones and accessories made up 40% of Apple’s total.Analysts had expected Apple to earn $2.45 per share on $12 billion in revenue, according to a survey from Thomson Reuters.

The company said it sold 2.9 million Macs, a 33% increase. IPod unit sales edged down 1% but Apple still sold 10.9 million of the digital players.

Apple didn’t start selling the iPad, its new touch-screen tablet computer, until after the fiscal second quarter ended. During a conference call, analysts pressed for more details on Apple’s decision to postpone by a month to late May the international launch of its new tablet computer.

Tim Cook, Apple’s chief operating officer, said there are no production problems with the iPad. The international launch has been delayed only because of demand in the US, where Apple said it sold more than 500,000 iPads in its first week.“It has shocked us, the level of demand, at least initially. We’ll see what happens from here,” Cook said.

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