Apple
IPhone sales more than doubled from last year, helping Apple beat analysts profit estimates by 25 cents a share. The company also reiterated that Chief Executive Officer Steve Jobs is expected to return at the end of June. At EBay, sales of fixed-price products grew 12 percent, helping the company expand beyond its traditional auction model.
“Consumer spending looks a little more resilient than people had feared,” Shaw Wu, an analyst with Kaufman Brothers LP, said in an interview from San Francisco. “Corporate spending is still more challenged, but it seems like consumer spending is holding up decently.”
Apple, based in Cupertino, California, rose as much as 4.5 percent to $126.95 yesterday in extended trading. EBay, based in San Jose, California, climbed as high as $16.08, an 8.8 percent gain.
The reports indicate that consumer-technology companies may be recovering more quickly than those that serve businesses, said Wu, who recommends buying Apple shares. Consumers are spending money on home-entertainment devices that cost a few hundred dollars. Businesses, meanwhile, are cutting jobs and delaying technology projects.
Mac Resilience
Apple maintained sales in the slower post-holiday period by updating its iMac desktop computer and iPod Shuffle music player. The company sold 3.79 million iPhones last quarter, after entering more countries. IPod shipments climbed 3 percent to 11 million. Mac sales, which dropped 3 percent to 2.22 million, also beat projections.
“Im very pleased with the resilience of the Mac and even the iPods,” Erick Maronak, chief investment officer of Victory Capital Management Inc. in New York, said in a Bloomberg Television interview. “A lot of people argue everyone has an iPod, but they are still selling at 11 million a quarter. Thats pretty impressive.”
Apples net income rose 15 percent to $1.21 billion, or $1.33 a share. Sales climbed 8.7 percent to $8.16 billion in the period, which ended March 28.
EBay, the most-visited U.S. e-commerce site, stemmed a decline in sales in part by highlighting a “Daily Deal” on the front page, CEO John Donahoe said. Consumer spending showed signs of strengthening, he said.
“In the first half of the quarter, growth rates were declining across all businesses and all formats,” Donahoe said in an interview. “In March, we saw growth rates flat-lining a little bit.”
Steadier Market
“An earnings report like this, given the muted environment were in for e-commerce, should be the kind of report that will backstop the stock price,” said Moran, who has a hold recommendation on EBays shares.
Qualcomm Inc. reported preliminary results yesterday, saying its second-quarter operating profit met or beat its forecast of between $750 million and $850 million. Qualcomm, the worlds largest maker of mobile-phone chips, postponed giving a full report until April 27 because of settlement talks in a legal dispute with Broadcom Corp.
Not all technology companies fared well in the quarter. Shares of VMware Inc., the biggest maker of programs that let servers run multiple operating systems, fell after its sales forecast missed analysts estimates. Customers of the Palo Alto, California-based company are delaying software projects to save money, VMware said.
Goldman Sachs Group Inc. estimates that global technology spending will fall 9 percent this year. Technology purchases in developed economies, including the U.S. and Europe, will drop 12 percent.