Markets

Apple Stock Soars After Earnings Report

By Conrad Aenlle

Updated on: January 18, 2011 / 5:19 PM EST / MoneyWatch

Apple's stock (AAPL) leaped in after-hours trading Tuesday after the company reported earnings and sales that exceeded Wall Street expectations. Apple earned $6.43 per share on revenues of $26.7 billion for the quarter that ended in December, a 78 percent earnings jump that was well above consensus forecasts of $5.31 per share on $24.2 billion in revenues.

Apple reportedly provided guidance on performance for the current quarter that is above what analysts expect - earnings of $4.90 a share on revenues of $22 billion, compared with forecasts of $4.43 a share and $20.6 billion.

Apple's stock was trading above $354 soon after the announcement, compared to the closing price of $340.65, which had marked a decline of 2.3 percent for the day. The stock was lower throughout the session as traders reacted to the announcement on Monday that Steve Jobs, Apple's chief executive, is taking medical leave for the second time in two years.

As much as the stock has moved in the last day, one fund manager advises staying tuned for news due out a week from now that may provide an indication of how well Apple will do in the months ahead. Apple recently announced that its iPhone 4 will be sold soon for use on the Verizon (VZ) network. Kevin Landis, manager of the strongly performing Firsthand Technology Opportunities Fund (TEFQX) and a fan of Apple, will be looking over Verizon's earnings announcement on Jan. 25 to get an idea of how the new arrangement will affect Apple's results:

"Looking forward . . . I'd try to gauge the Verizon effect. Since Apple will downplay it, observers will actually get more insight from the Verizon call. It's going to be a difficult piece of guidance for Verizon to communicate. Since they'll likely take a big hit on the per-phone subsidy, they need to guide to the high side of anticipated iPhone sales - in order to be 'conservative.' "
That could give a further boost to Apple's stock, but remember that at $354 a share, there remains much scope for disappointment, as recent events show.