As if the stock markets didn’t have enough troubling them right now, with the post Martin Luther King holiday declines in the major averages despite two days of rallies, several key components began reporting quarterly earnings. Apple (NASDAQ: AAPL), the maker of iPods and Macintosh computers, earned $1.58 billion for its fiscal first quarter, or $1.76 a share on revenue of $9.6 billion. For the equivalent quarter last year, Apple’s earnings were $1.14 per share, with net income of $1 billion on $7.12 billion in sales. Although this beat analysts’ estimates by 13-14 cents per share, Apple shares were down over 10% in response to a weak earnings forecast. Despite the 58% growth in net income, Apple said it is expected to earn about 94 cents in the next quarter, which will be below analysts’ consensus.
The iPod, which was expected to continue to drive strong sales going forward, has been selling at an average retail price of around $175 each, but Apple has introduced models which incorporate media players and Wifi features that have increased the sales price to the $299-$399 range. The stock, which has traded as high as $202 per share, had fallen to $121 in trading, then popped back today to $135. Apple management remains confident of its immediate and long term prospects.
In other earnings’ news, Motorola (NYSE: MOT) profits fell, though despite beating the consensus estimates, Motorola stock traded as low as under $10 a share this week. Better news came out from Texas Instruments (NYSE: TXN), which saw profits rise 13%. This was not enough to keep the Nasdaq from sliding (which was down for the week despite the latest rallies), as the tech-heavy index reacts sensitively to all technology stocks, regardless of what exchange they are listed on. The latest important tech earnings report featured better news from major Dow stock Microsoft (NYSE: MSFT), which reported in at 50 cents a share versus last year’s 26 cents. The stock was up 1.32 in trading on the news, and an additional 1.70 to 34.95 in early after hours trading.
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