Apple profit rises 78% on demand for iPads, iPhones

Apple Inc, whose Chief Executive Officer Steve Jobs said on Tuesday he is taking a medical leave of absence, posted a 78 per cent jump in quarterly profit, helped by holiday buying of iPads, iPhones and Macintosh computers.

Net income in the fiscal first quarter rose to $6 billion, or $6.43 a share, from $3.38 billion, or $3.67, a year earlier, Apple said today in a statement. Analysts projected profit of $5.41 a share, the average of estimates compiled by Bloomberg. Apple rose as much as 4.8 per cent in extended trading.

Sales increased 71 per cent to a record $26.7 billion, exceeding the $24.4 billion predicted by analysts in a Bloomberg survey. The company sold 7.33 million iPad tablet computers in the first holiday season for the device, topping the 6 million projected by Mike Abramsky at RBC Capital Markets. The results suggest Apple will fare well in the coming months as Jobs hands day-to-day operations to Chief Operating Officer Tim Cook, said Ashok Kumar, an analyst at Rodman & Renshaw.

“It was a blowout quarter,” said Kumar, who’s based in Palo Alto, California. “The momentum should sustain for the next 12 months with the iPad and iPhone refresh. The uncertainty investors have to prepare for is beyond that time frame in terms of the company’s ability to execute in this flawless manner and develop new markets.” He rates Apple a “buy” and doesn’t own it.

Apple, based in Cupertino, California, climbed to as high as $357 in extended trading, after earlier falling $7.83 to $340.65 at 4 pm New York time on the Nasdaq Stock Market. The shares rose 53 per cent last year. The company is the world’s second-most valuable company behind Exxon Mobil Corp.

‘Well-oiled machine’
Jobs, 55, who has been fighting a rare form of cancer since 2004, said in an e-mail disclosed yesterday, “I love Apple so much and hope to be back as soon as I can.”

The company is likely to fare well under Cook, said Barry Jaruzelski, a partner at Booz & Co.

“It’s a well-oiled machine,” said Jaruzelski. Jobs’s “ethos and things he focuses on from marketing and innovation are deeply embedded in the process and people, making it an institutional capability,” he said.

Apple sold 16.2 million iPhones, 4.13 million Mac computers and 19.5 million iPod media players, according to the statement. Abramsky at RBC Capital Markets predicted sales of 16 million iPhones, 6 million iPads, 18.7 million iPods and 4.2 million Macs.

Apple, whose potential US customer base for the iPhone will almost double by adding Verizon Wireless as a carrier next month, said profit this quarter will be $4.90 a share on sales of $22 billion.