Instant view: Apple sales surge, IBM beats Street
(Reuters) - Apple Inc smashed Wall Street's sales forecasts for the holiday quarter, the day after announcing its Chief Executive Steve Jobs would take leave for medical reasons. Its shares rose after hours.
The following are immediate comments from investors and analysts:
MARK BRONZO, LARGE CAP GROWTH PORTFOLIO MANAGER, SECURITY
GLOBAL INVESTORS
"We are very impressed with Apple's results, especially the number of iPhone and iPad units sold, which exceeded even the most optimistic estimates."
"Apple produced 38.5 percent gross margins, showing real operational discipline despite rapid growth. The stock will be volatile because of the news concerning Steve Jobs' health, but we believe the stock heads higher as 2011 marches on."
ASHOK KUMAR, ANALYST, RODMAN & RENSHAW
"The only place where we saw some upside surprise was with iPad."
"It was very strong in near-term product momentum. For the 12-month horizon the operational risk is very limited because most of its new products will be upgrades."
"The unknown is what happens beyond this timeframe. Steve (Jobs) is the conductor so to speak. Yes, there's a deep bench at Apple but, it's only Steve that makes it bigger than the sum of its parts."
"You've very big egos at Apple. Steve is unique in that he can corral all these forces. I don't think there's another individual at Apple capable of that."
"For investors, the options are stark near term. There's no comparable company in the tech sector which is considered an alternative to Apple."
"You can't put it into IBM. IBM is a different beast. It's more of a beta story rather than an alpha story. It's not going to outperform. The lack of alternatives will keep investors in Apple."
RAJESH GHAI, ANALYST, THINKEQUITY
"As far as execution is concerned (chief operating officer) Tim Cook has been the guy leading the effort over there. He's in charge and I think they have pretty decent bench strength to help him execute on the plan."
"Longer term, Job's creativity and vision are going to be important and we'll have to see if anyone else can step up and provide that vision as far as products are concerned. But the stock really depends on what the company is going to do for the next couple of years and I don't see any problem on that account."
DANIEL ERNST, ANALYST, HUDSON SQUARE RESEARCH
"In some ways it was no surprise. Apple blew away earnings expectations, again. It seems to be a recurring event for these guys. It was across the board, top to bottom another great quarter."
"It is still impressive even for someone who watches it day to day to see an outperformance of this magnitude."
On Jobs' health: "The good news is I feel like the company has been a little more straightforward this time around. As we said last time around, the depth of product engineering and design and capacity of the company is not the result of one guy. It's the result of a team. I think the DNA of Steve Jobs' design and business acumen is deeply ingrained in the company. It's my opinion, Apple no longer needs Steve Jobs -- that is part of the company's success."
YAIR REINER, ANALYST, OPPENHEIMER & CO
"Just another blowout. Apple blew out expectations in the product lines where you might think they would: the iPhone and the iPad."
"Analysts like me keep on raising expectations and Apple somehow manages to exceed them time after time."
"The results came in well ahead of rising street estimates, and Apple's guidance, which is typically very conservative and undershoots Wall Street estimates, this time leaped slightly ahead. That's a rare occurrence."
"I think Apple has been extremely consistent in the conservatism of its forecast. I don't think that Steve Jobs' medical leave would alter that. The strong guidance is probably more indicative of Apple's confidence on the eve of the iPhone's launch with Verizon."
"Whether Steve Jobs stays or goes, the impact from that probably won't be felt in the company's results for two or three years. That leaves a large interim period during which investors will have no choice but to focus on the information that they have and that's going to be the results and the products that Apple actually comes out with."
VAN BAKER, ANALYST, GARTNER
"Looks pretty impressive. The 86 percent increase for iPhones, that is confounding. It's not like the market is not relatively mature."
"Hard to criticize anything in here. I will be curious to get a little more detail on the iPods."
On Jobs' health: "I don't think it's that big of an issue. The team is pretty strong. Tim (Cook, standing in for Jobs) is an excellent operations guy. The only question is who would step into the role as the public face of Apple? That doesn't have to be the CEO, there are plenty of guys who could step into that role."
"I think they are going to do just fine."
COLIN GILLIS, ANALYST, BGC PARTNERS
"It's crazy good. The company is firing on all cylinders. The 7.3 million iPads, that is a great number, that is about 1 million more than people are looking for."
"The iPad continues to be a game changer."
On Jobs's health: "Steve is an important part of what Apple is, everyone wants to know does the company fall apart? No."
"More data is always better than less (on health issues). But nonetheless they disclosed what they are going to disclose consistent with patterns."
SHAW WU, ANALYST, KAUFMAN BROS
"The iPad numbers were huge. The production issues people were worried about are obviously behind and the demand for a new product continues to be strong."
On Jobs' medical leave: "It's important but at the same time, as the company continues to execute, it becomes more secondary. The way Steve thinks, his methodology, his sense of style, frankly a lot of it has been ingrained into the Apple culture. It's not as big a deal as some may make it out to be."
"Steve's legacy is Apple and we think it's going to continue, they have a DNA in place, a winning culture."
STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH MORGAN
"Clearly it's a huge number. You got the feeling it would be a good number when they announced Steve Jobs' medical leave earlier. They weren't going to follow that up with more bad news."
"It's pretty clear this was a massive beat ... significantly better across the board and better than some of the more bullish whispers going around."
BRIAN MARSHALL, ANALYST, GLEACHER & CO
"Apple's results were equivalent to IBM and very solid all around."
"iPad was the most impressive. They reported more than 7.3 million iPad sales versus my expectation for 6.3 million."
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On the same day, IBM beat Wall Street's expectations for the fourth quarter and forecast higher profit for this year. Its shares rose 2.8 percent after hours.
BRIAN MARSHALL, ANALYST, GLEACHER & CO
"It was very solid all round. Service signings were very positive so this is indicative of solid trends."
"The results from IBM as a tech juggernaut were very solid."
CHANNING SMITH, PORTFOLIO MANAGER, CAPITAL ADVISORS
"At first glance, looks like a very solid report."
"Across the board, looks like all segments performed well. One of the key issues for IBM was the services area, and I think that was a big concern for investors. It wasn't a knockout, but I think you saw revenues increased 2 percent."
"What you're seeing with IBM is a company that continues to execute, they've shown tremendous earnings consistency over the last couple of years and they have excellent earnings visibility."
"You had good earnings, which shows the underlying business is performing well, the segments are performing well, revenue growth was better than expectations and the forecast was better than expected."
"We think that the risk-reward here is pretty attractive and we see fairly limited downside to IBM."
"Looking at the valuation, roughly around 12 times, we're getting to a point after the run that we've seen that IBM is probably pretty fairly valued. I think there's upside, but I think you're looking at a return that's probably going to match the overall market."
BOB DJURDJEVIC, ANALYST, ANNEX RESEARCH
"They sure blew my (revenue) forecasts out of the water."
"The mainframe business is going gangbusters. Software is also up in double digits. The rate of increase is higher than I expected."
"While current (services) revenues are increasing only modestly, there's indications there will be faster growth ahead because of the backlog surge. It's an indication of increased spending for the IT sector. As goes IBM, so goes corporate America these days."
"In light of yesterday's news at Apple and that stock going down I think that will free up additional capital for investors to spread around other stocks that are undervalued like IBM and Intel."
(Reporting by Alexei Oreskovic, Sinead Carew, Noel Randewich, Liana B. Baker, Caroline Valetkevitch, Jennifer Ablan and Jennifer Saba)
Credit: Reuters (www.reuters.com)
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