SAN JOSE, Calif. – Shares of Apple Inc. (AAPL) rose more than 6 percent early Thursday, continuing to soar above $100 for the first time after the company walloped Wall Street expectations with quarterly profit that jumped 88 percent on strong sales of its iPod players and Macintosh computers.
Apple shares rose $6.25 to $101.60 in morning trading Thursday on the Nasdaq Stock Market. The earnings results were released after the market closed Wednesday, and the stock leaped to $102.40 in after-hours trading.
Investor optimism in the trendsetting company may have also been bolstered by a vote of confidence the board of directors gave Apple's chief executive officer, Steve Jobs.
The board on Wednesday defended the iconic CEO from new accusations by a former Apple executive who alleged Jobs may have had a more significant role in the company's backdating of stock options than previously stated.
For the first three months of the year, the Cupertino-based company said Wednesday it earned $770 million, or 87 cents per share, up from $410 million, or 47 cents per share, in the year-ago period.
Sales were $5.26 billion, up 21 percent from $4.36 billion last year.
Analysts, on average, were looking for earnings of 64 cents per share on sales of $5.17 billion, according to a poll by Thomson Financial.
Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter, representing a 36 percent growth in Macs and 24 percent growth in the music players.
Sales from its market-leading iPods and other music-related products accounted for 44 percent of the quarter's total revenue.
"We are very pleased to report the most profitable March quarter in Apple's history," said Peter Oppenheimer, Apple's chief financial officer.
Helped by favorable component price drops, notably in memory parts, Apple achieved gross margins of more than 35 percent, up from about 30 percent in the quarter a year ago. Oppenheimer cautioned analysts during a conference call that such high margins were likely "not sustainable."
The company said it expected revenue of about $5.1 billion and earnings per share of about 66 cents in the current quarter, the third in Apple's fiscal year. Apple's were lower than the forecasts Wall Street had before Wednesday, but analysts say Apple's forecasts are typically conservative.
Expectations for the iPhone, a cell phone-iPod combination, are continuing to run high, and analysts pressed Apple executives for details Wednesday. Company officials refused to predict the number of units that would be available at launch in late June.
Given its arrival late in the current quarter, Oppenheimer said in a phone interview that he did not expect the iPhone to have a significant impact on sales for the period.
The iPhone is Apple's latest big bet into a new product category, and company officials reiterated Wednesday its high hopes for success.
When Jobs introduced the sleek gadget in January, he announced a goal of selling about 10 million units in 2008.
At Wednesday's closing price, Apple shares have gained about 11 percent this year, boosted partly by anticipation over the iPhone. Investors have largely remain unfazed by Apple's stock options troubles, with industry analysts widely predicting Jobs' position at Apple will remain intact.
But legal experts say Jobs is still in legal limbo: An investigation by federal prosecutors continues and the accusations thrown Tuesday by the company's former chief financial officer, Fred Anderson, raises questions about Jobs' culpability.
Anderson's allegations came on the same day he immediately settled his case with the Securities and Exchange Commission, which filed backdating-related civil charges against Anderson and Apple's former general counsel Nancy Heinen.
The SEC did not charge any other individuals and said it did not plan to pursue further action against Apple itself.
It also defended Apple's internal probe last year that cleared Jobs and current management of any wrongdoing.
"We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple," the board said in a statement.