Apple turns in record Q1: $6b profit on $26.7b revenue, 16.2m iPhones sold

Apple reported a record $6bn in quarterly profit and voiced confidence in its strategy a day after announcing that its iconic chief executive, Steve Jobs, was taking an open-ended leave of absence for undisclosed medical reasons.

Apple shares fell more than 2 per cent on Tuesday, when US trading resumed for the first time since the company had said that Mr Jobs would go on leave and quoted him saying that he hoped to return “as soon as I can”.

Apple's announcement of Steve Jobs' medical leave just one day before releasing its Q1 financial results struck us as well-planned yesterday, and here we are: if Cupertino's record $6 billion profit on a record $26.7 billion in revenue isn't enough to turn that frown -- and stock slide -- upside down, well, nothing else will. iPhone 4 sales were predictably strong through the holidays, clocking in at a record 16.2m units, or up 86 percent from last year, while Mac sales went up 23 percent to a record 4.13m and iPod sales were stronger than expected at 19.45m, a seven percent decline. As for the iPad, Apple's tablet had its second straight dominant quarter, with record sales of 7.33 million -- some 3 million more than the Mac. Apple's financial call with new acting CEO Tim Cook and CFO Peter Oppenheimer is scheduled to start at 5PM EST -- check after the break for our usual liveblog while you're listening live on Apple's site.

[engadget]

Apple falls but its rivals gain, pushing Nasdaq index to 3-year high

New worries about Apple Inc.’s future failed to hold back the rest of the stock market on Tuesday: Key indexes shook off some early selling to close at fresh multiyear highs.

And what’s potentially bad for Apple -- co-founder Steve Jobs’ surprise decision to take another medical leave-of-absence -- might have been viewed as good for the company’s many tech rivals.

Nobody every accused Wall Street of having a heart, after all.

While Apple dropped $7.83, or 2.2%, to close at $340.65, shares of Google Inc. surged $15.45, or 2.5%, to $639.63, a three-year high. Google’s Android smart phone operating system is going head-to-head with Apple’s iPhone, of course.

Among other tech giants and Apple combatants, Microsoft Corp. added 36 cents, or 1.3%, to $28.66; Oracle Corp. gained 28 cents, or 0.9%, to $31.53; and Dell Corp. was up 5 cents, or 0.4%, to $14.10.

Blackberry smart phone maker Research in Motion Ltd. rose as much as 2.6% early Tuesday before falling back to close with a gain of 45 cents, or 0.7%, to $65.22.

Rallies in Google, Microsoft, Oracle and other tech shares more than offset Apple’s decline within the Nasdaq composite index, which closed up 10.55 points, or 0.4%, to 2,765.85. That left the Nasdaq at its highest level since November 2007, and up 4.3% just since the new year began.

For the market overall, after the powerful rally of the last 4 1/2 months a significant pullback shouldn’t surprise anyone. The Nasdaq is up 31% since Aug. 31; the Dow Jones industrial average is up 18% in the same period.

“Dow's Doubters Say Market Is On Borrowed Time” was the headline in the Wall Street Journal on Tuesday. The story included all of the usual suspects: Investor sentiment surveys show most people are bullish, market “fear” indexes such as the VIX are too low, and weak trading volume suggests the recent advance has flimsy support.

For now, that may leave the bulls at the mercy of fourth-quarter earnings reports, which will begin to pour out this week.

On that front, Apple gave its investors a reason to stay aboard for the ride: The company said after markets closed Tuesday that fourth-quarter profit soared 78% to $6 billion, or $6.43 a share, far surpassing analysts’ consensus mean estimate of $5.41 a share.

Apple also predicted a profit of about $4.90 a share in the current quarter, compared with analysts’ mean estimate of $4.47.

Apple shares rose in after-hours trading to $345.10 -- recouping more than half of what they lost in regular trading. The stock had reached a record high of $348.48 on Friday.

Stocks: Tech and bank earnings in spotlight

NEW YORK (CNNMoney) -- Stocks have shrugged off economic reports lately, looking instead to this week's results from big names in the technology and financial industries.

"All eyes on are on the earnings -- they drive stock prices," said Keith Springer, head of Springer Financial Advisors. "The real key is corporate America remaining strong. Little else seems to matter much right now."

In that case, traders will have a lot to digest over the next few days. About 10% of the S&P 500, or 49 companies, will report earnings this week.

Analysts say the market is due for a correction, but is "resting" by moving sideways -- instead of lower -- as it awaits the avalanche of earnings this week.

On Friday, the Dow and the S&P posted their seventh straight week of gains. That's the highest streak for the Dow since the two months of consecutive gains that ended in April 2010.

Traders will be looking to the earnings reports to see if companies talk about an improving economic picture, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"They also want to see what company management says about hiring prospects -- because in order to sustain an economic recovery, we need to see jobs growth," he added.

Luschini said Wall Street is looking for big numbers this earnings season: "news that doesn't continue to really surprise on the upside looks like it's going to be treated as indifferent."

S&P 500 earnings are expected to have climbed 31.8% in the fourth quarter of 2010, according to earnings tracker Thomson Reuters. S&P companies' revenues are expected to have risen 6%.

The recession brought nine straight quarters of losses until the final quarter of 2009, which snapped the downward trend. Then the first three quarters of 2010 logged growth -- so this reporting period could bring the fifth-straight upward quarter.

Springer said he's expecting fourth-quarter 2010 earnings were "stellar," especially in the banks and techs that are reporting this week.

JPMorgan Chase (JPM, Fortune 500) laid the foundation for strong bank earnings on Friday, when it reported a 47% jump in fourth-quarter earnings to $4.8 billion, or $1.12 per share. That beat the 99 cents per share forecast by analysts.

"Banks are going to make a fortune," Springer said.

Several technology companies, including Apple, Google and IBM will also report this week. Springer notes these reports could give some insight into business spending.

Despite a holiday on Monday, the week is still chock-full of economic reports. Many are in the housing sector, with data due about housing affordability, new home construction, building permits and existing home sales.

Monday: The U.S. stock market, bond market and federal offices are closed in observance of Martin Luther King, Jr. Day.

Tuesday: A reading on New York regional manufacturing in January is due before the bell. Also, Citigroup (C, Fortune 500) will report its earnings before trade starts.

After the start of trade, the National Association of Home Builders and Wells Fargo will release a report with their housing affordability index. Economists polled by Briefing.com expect the reading stayed flat at 16 in January.

After the bell, both Apple (AAPL, Fortune 500) and IBM (IBM, Fortune 500) will release earnings results.

Wednesday: Chinese President Hu Jintao will visit the White House to talk with President Obama.

Before the start of trade, Goldman Sachs (GS, Fortune 500) and Wells Fargo (WFC, Fortune 500) will report quarterly earnings.

Also before the opening bell, government figures for December are expected to show that initial construction of single family homes fell and requests for building permits rose.

Thursday: Morgan Stanley (MS, Fortune 500) will report results ahead of the bell, while Google (GOOG, Fortune 500) and Advanced Micro Devices (AMD, Fortune 500) come out after the close of trade.

The weekly jobless claims report is due in the morning. Also out early is the Philadelphia Fed index, a regional reading on manufacturing.

The weekly crude oil inventories report is due later in the morning, one day later than usual because of Monday's holiday.

The National Association of Realtors will release its monthly report on existing home sales, which analysts polled by Briefing.com expect rose to an annual rate of 4.8 million in December from 4.68 million the previous month.

The Leading Economic Indicators (LEI), from the Conference Board, is expected to have fallen to 0.6% in December from 1.1% the previous month.

Friday: Both Bank of America (BAC, Fortune 500) and General Electric (GE, Fortune 500) will report earnings before the start of trade.

Cost of making a Penny is greater than a Penny

I just found out that it costs more than a penny to manufacture a penny. Specifically, it costs 1.62 cents to produce that 1 cent copper coin. And that's been the case for a while now! What the hell?

Why's it cost so much? Apparently, the penny is made from 2.5% copper and 97.5% zinc and those metals have gone up in price as of late. In fact, if you could melt the coin, you'd have materials totaling 1.62 cents—more than the cent that measly penny is worth. That's crazy! What's crazier is that it's been that way since 2006. Aren't useful things supposed to be greater than the sum of its parts? Shouldn't they have changed the metal mixture to something cheaper by now?

Apparently, the director of the Mint tried to make the penny cheaper to manufacture but Congress shut that initiative down. As it currently stands, the Treasury boss can "recommend changes in metal content or in the amount of coins produced" but only Congress can make the final decision.

So maybe it'll eventually become worth the money to make! Though really, I figured this loss in manufacturing would make for a good reason to kill off the penny (I mean, who likes pennies?). But with old school Congress calling the shots, I doubt that'd ever happen—no matter how useless and expensive pennies become.

[Gizmodo]