Apple Looking Solid Across the Board

The market seems pleased with the quarterly results released by Apple Computer last night.

Apple, whose shares had been declining during much of the past quarter on the concerns and fears of investment analysts, regained some of its luster on Wall Street by recording booming sales of notebook computers and relatively steady shipments of iPods, albeit with a slight sequential dip in volume.

Revenue for Apple’s third quarter was $4.37 billion, up 24 percent from last year’s quarterly revenue of $3.52 billion. Net income was $472 million, or 54 cents per share, an improvement of 48 percent compared with last year’s results of $320 million in net income and 37 cents per share. Analysts surveyed by Thomson First Call expected Apple to report $4.4 billion in revenue and earn 44 cents per share. That’s called blowing away expectations, and that’s part of the reason why the stock is up sharply today during a session that is decidedly mixed for technology stocks.

Mac sales were up 12 percent compared with last year, with Intel chips powering 75 percent of the units sold, and notebook computers led the charge. Apple shipped 798,000 notebooks in the period — a 61-percent improvement in unit shipments as well as in product revenue. Desktop Macintoshes sold only 529,000 units, a 23 percent year-over-year decline. Desktop and notebook shipments overall increased 12 percent worldwide, outpacing the growth of the overall personal-computer market during the quarter. As a result, Apple gained market share, globally and in the US domestic market.

Usually, a stock doesn’t advance immediately after a company guides market expectations lower, but Apple has provided an exception to the rule. The company predicted fourth-quarter revenue would be about $4.5 billion to $4.6 billion, less than the $4.9 billion analysts had been anticipating.

Notwithstanding the reduced guidance, the immediate future looks bright for Apple. Notebook sales are surging, a refresh of the iPod product line appears imminent — perhaps including a larger-screen video model — Intel-based versions of Apple’s desktop computers and servers for the professional market are on deck, and the company has plans to counter whatever incursions cell-phone-based music players might hope to make against the iPod. Market-research also suggests that Apple is converting a greater number of PC users into its camp, perhaps encouraged to make the switch by Boot Camp, software that allows Intel-based Mac to run Windows applications as well as native OS X programs.

All in all, Apple is looking solid, and its latest quarterly results have assuaged most of the concerns market analysts had harbored regarding the company’s ability to perform consistently and find a way forward that would provide a suitable encore to the “halo effect” bestowed by the success of the iPod.

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