“Apple Computer surged 8 percent Thursday as sales of more than 2 million iPod digital music players helped lift the company’s fourth-quarter net income to more than twice what it earned a year ago,’ Rex Crum reports for CBS.MarketWatch. “‘The investments we have made are starting to pay off through higher revenue and operating margins,’ said Peter Oppenheimer, chief financial officer of Cupertino, Calif.-based Apple, on a conference call with analysts.”
Crum reports, “Apple’s shares rose $3.13, or 7.9 percent, to $42.88 in recent trading, after the company said it earned $106 million, or 26 cents a share, on revenue of $2.35 billion for the three months ended Sept. 25. During the fourth quarter of fiscal 2003, Apple reported net income of $44 million, or 12 cents, on revenue of $1.72 billion. Excluding $4 million in aftertax restructuring charges, Apple earned $110 million, or 27 cents a share, and thus beat the average estimates of analysts surveyed by Thomson First Call amounting to a profit of 18 cents a share on $2.15 billion in revenue. Operating margins climbed above 5 percent.”
“The company’s forecast-beating results prompted a raft of positive broker comment and earnings estimates that were revised higher,” Crum reports. “Apple said it shipped 836,000 Macintosh computers, up from 787,000 a year ago. Oppenheimer said that iPod sales are bringing new customers to the Macintosh. ‘We continue to sell still, (in) retail stores today, close to 50 percent of computer sales are to people who are either buying the PC for the first time are or new to (the) Mac,’ Oppenheimer said ‘And I think one of the big reasons is the halo effect that the iPod and music is having.’ Merrill Lynch said it is because of this so-called ‘halo effect’ that it believes the positive impact on Mac sales may still be coming. The broker raised its price target on Apple to $49 from $44 and lifted its earnings estimate for fiscal 2005 to $1.20 a share from 95 cents.”
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