Apple Shares Jump After Earnings Report

NEW YORK – Shares of Apple Computer Inc. (AAPL) rose more than 10 percent Thursday, boosted by its report that quarterly profit and revenue jumped on robust sales of its iPod (search) digital music players, and optimism for results in the current quarter.

Late on Wednesday, Apple said its fiscal first-quarter profit nearly quintupled, while revenue rose 74 percent from a year ago. Apple shipped 4.58 million iPods in the quarter, up from 2 million in the previous quarter.

Wall Street analysts were equally impressed by the so-called "halo effect," which sees rising iPod demand translating into higher sales of Apple's Macintosh (search) computers.

"(We) believe that Apple can grow its consumer share," said Banc of America Securities analyst Keith Bachman, in a note to clients. "Our survey work indicates strong brand appeal and interest in converting from Windows systems to Macs based on better media capabilities and virus protection."

Several analysts on Thursday raised their rating on Apple, including Bachman, who upgraded the stock to "buy" from "neutral." Prudential Equity Group raised its opinion to "overweight" from "neutral."

The shares climbed $6.65 to $72.11 on Nasdaq.

Optimism surrounding Apple, which earlier this week introduced a solid-state version of the iPod that saves music files to flash memory rather than a hard drive, may extend to some of its suppliers, analysts said.

PortalPlayer Inc. (PLAY), which develops semiconductors and software for personal media players such as the iPod, rose to $25.50, up 97 cents, or 3.9 percent.

"I think this momentum that happened last year is going to continue," said Owen Fitzpatrick, head of the U.S. Equity Group for Deutsche Bank Private Wealth Management. "Apple is a name in technology that at least for the next couple of quarters will have the wind at its back."

Apple said it sold 337,000 of its all-in-one iMac G5 (search) computers in the quarter. Altogether Apple sold 1.05 million Mac computers, generating $1.61 billion in revenue and up from 829,000 in the year-ago quarter. Sales of iPods generated $1.21 billion in revenue.

Reuters and the Associated Press contributed to this report.