Shares of Apple Inc. jumped Wednesday after it took investors by surprise yet again, beating expectations for iPhone sales.
Late Tuesday, the Cupertino, Calif., company reported results for the January to March period, its fiscal second quarter. The shares had rallied strongly during the quarter, catapulting Apple's market capitalization far above that of Exxon Mobil Corp. and cementing its position as the world's most valuable company.
But in the last few weeks, the shares retreated 14 percent off the all-time high of $644, as investors feared that phone companies would try to curb iPhone upgrades, which are costly to them.
Apple quieted its skeptics, saying it had shipped 35.1 iPhones in the quarter. That was millions more than analysts had expected. The sales propelled Apple's earnings to $11.6 billion, up 94 percent from a year ago, and revenue to $39.2 billion, up 59 percent.
Analysts said there are likely weaker iPhone quarters ahead, before the iPhone 5 launches, probably some time this fall. But the iPad should pick up some of the slack: Apple just launched a new model, and it hasn't been able to make it fast enough to satisfy demand so far.
Analyst William Power at R.W. Baird raised his price target on the stock from $700 to $740, based on his revised outlook for calendar-year 2013 earnings. Like others, he noted that Apple sales tripled year over year in China and Taiwan, and there's plenty of room to grow.
At JMP Securities, Alex Gauna also raised his 2013 earnings estimate, but said there would be better opportunities to buy the stock before the iPhone 5 launches.
"It is increasingly difficult to imagine that Apple is not operating at peak growth and margin levels, beyond which tech equity performance tends to struggle," he wrote.
Apple shares rose $49.50, or 8.8 percent, at $609.78. That erased a week of losses and restored $46 billion in market capitalization to the company.
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