Apple's profits surge 78%, with iPad sales one million ahead of forecasts

THE health of Apple chief executive Steve Jobs had been expected to overshadow the company's quarterly results announcement last night, but when the electronics giant unveiled a sales surge of more than 70 per cent after Wall Street had closed, it was the figures that were the major talking point.

• Steve Jobs has taken medical leave for an unspecified time. Picture: Getty Images

Analysts had been predicting the consumer electronics powerhouse behind the big-selling iPhone and iPad to report sales growth of about 50 per cent for its first fiscal quarter, with sales of about $24.4 billion.

However, Apple stunned the industry when it revealed its revenue had in fact risen 71 per cent to $26.7bn, a full $3.3bn ahead of forecasts.

And net income – profit – had risen a stunning 78 per cent, also well ahead of analysts' forecasts.

Apple shares, up 62 per cent in the last 12 months, had fallen during the day's trading in new York, affected by the news of Job's enforced absence for medical reasons.

However, they had earlier risen in European trading, where the initial shock had been felt on Monday, when US markets were closed.

Apple, the world's largest technology company by market capitalisation, said on Monday that Jobs, 55, was taking medical leave of absence, without specifying a return date or detailing his condition.

Shawn Kravetz, president of Boston-based hedge fund firm Esplanade Capital, said Jobs' latest medical leave was clearly a negative, but "that doesn't take away from an extraordinary company with a great team".

Aside from Jobs' health, the company is entering 2011 on a roll, a cash-generating machine with surging sales across its product lines. Apple says it sold more than seven million iPads, about a million more than expected, and more than 16 million iPhones in the quarter.

Net income jumped to $6bn, or $6.43 per share, up 78 per cent from $3.4bn, or $3.67 per share.

Apple's advantages include the global spread of the iPhone, expected to sell more than 60 million units this year; the rise of the iPad which single-handedly created the tablet computing market; and continued strong growth from the resurgent Mac line of computers.

Out-sized surprise in Apple results has become an article of faith among investors. The company has beaten Wall Street's earnings estimate by an average 29 per cent over the past two years.

Shares in Apple, which closed before the release, leapt 4 per cent to about $354 in after-hours trading, from a regular-session close of $340.65.

Apple's show of strength came as Wall Street displays increasing confidence in the management team surrounding Jobs, who seeks medical treatment for an unspecified condition and for an indefinite time.

In Jobs' absence, it will be up to chief operating officer Tim Cook to decide what Apple plans to do with its $50 billion-plus pile of cash and investments.

The company is likely to fare well on his watch, said Barry Jaruzelski, a partner at Booz & Co. "It's a well-oiled machine," said Jaruzelski.

"Jobs's ethos and things he focuses on from marketing and innovation are deeply embedded in the process and people, making it an institutional capability," he said.

"It was a very good quarter," said Jane Snorek, who helps oversee about $75bn at Nuveen Asset Management. She said Apple is Nuveen's biggest holding.