Apple Inc. rose to a record in extended trading 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 percent, 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 on the Nasdaq Stock Market. Apple rose 6.4 percent in German trading to the equivalent of $200.3 at 9:54 a.m. in Frankfurt.
“I’m glad I didn’t sell,” Hakim Kriout, portfolio manager for Grigsby & Associates, said in an interview from New York. “I’m sitting back and looking at what Apple has done, and I think Apple is the new Sony. An entire generation is growing up demanding Apple’s products, and nothing but Apple’s products.”
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.
Fourth-quarter net income rose 47 percent to $1.67 billion, or $1.82 a share, Apple said yesterday. Sales advanced 25 percent to $9.87 billion in the period, which ended Sept. 26. Analysts surveyed by Bloomberg estimated revenue of $9.22 billion and profit of $1.43 a share.
First-quarter revenue will be 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.
“Apple is traditionally conservative with their expectations,” Ryan Jacob, portfolio manager of Jacob Internet Fund, said in an interview from Los Angeles. Apple is his firm’s largest holding. “The fact that their revenue guidance is in line with estimates suggests analysts’ estimates are low, and will be revised higher.”
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. Brian Marshall, an analyst with Broadpoint AmTech Inc. in San Francisco, had predicted shipments of 7 million iPhones, 2.8 million Macs and 10 million iPods. 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.
Demand for the iPhone outstripped supply for most of the quarter, said Chief Operating Officer Tim Cook. “Until September, the iPhone 3GS was short virtually everywhere,” he said on a conference call.
“The Mac sales show growth rates that are returning to pre-recession levels, and the iPhone shows this isn’t a product cycle -- it’s a movement,” said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis. “They beat the Street’s revenue estimate by 8 percent, and that’s unheard of.”
Apple’s gross margin, the percentage of sales remaining after taking out production costs, was 36.6 percent, up from 34.7 percent a year earlier. Fourth-quarter net income rose from $1.14 billion, or $1.26 a share, a year earlier. The stock’s run-up signals that investors have put concerns about Jobs’s health behind them, said Shaw Wu, an analyst at Kaufman Bros. in San Francisco. Jobs’s Leave
Jobs, a cancer survivor, had a liver transplant this year. During his medical leave, Cook took charge of day-to-day management and worked with a cadre of executives to unveil new products. Apple beat analysts’ earnings estimates while Jobs was out.
“Apple is a culture, it’s a style, it’s a way of thinking,” Wu said. He recommends buying Apple shares, which he doesn’t own personally. “Investors have become accepting that it’s ingrained in the company, rather than in one individual.”
Jobs, 54, made his first public appearance in September after having the transplant. He introduced updated iPods, such as a Nano player with a built-in video camera.
Apple’s results may prod analysts to raise their price targets to $250 or higher, said Jane Snorek, an analyst with Minneapolis-based First American Funds, which owns Apple shares.
(Source: Bloomberg)