Apple Inc. and Exxon Mobil Corp. will vie for the title of world’s most valuable company again today, letting investors decide whether high-tech growth prospects are a match for the oil industry’s gushing profits.
Apple passed Exxon for the first time yesterday, when its shares rose as much as 6.1 percent to $374.61 on the Nasdaq Stock Market, giving it a capitalization of $347.3 billion. After trading places with Apple several times, Exxon secured the top spot late in the session.
The showdown with Exxon follows Apple’s 14-year transformation from a personal-computer also-ran into a seller of everything from smartphones to digital music. Apple has already eclipsed Microsoft Corp., International Business Machines Corp. and Intel Corp., whose dominance of the technology industry in the 1990s helped nudge Apple to the fringes of the PC market.
“The Apple of today is different from the Apple of even a few years ago,” Shaw Wu, an analyst at Sterne Agee & Leach, said in an interview. “People who buy Apple tend to buy big and get your friends and family to do it as well. There’s nothing else like that.”
The shares have climbed 16 percent this year, fueled by sales of the iPad and iPhone, and a burgeoning business in China. Apple closed at $374.01 yesterday, up 5.9 percent, giving it a market value of $346.7 billion. Shares of Irving, Texas- based Exxon rose 2.1 percent to $71.64 on the New York Stock Exchange, valuing the company at $348.3 billion.
Exxon has tumbled since trading in July at more than $85 a share, as oil futures in New York have dropped. Exxon bought XTO Energy Inc. last year to tap natural-gas shale deposits in North America and is seeking to buy more gas reserves, even as futures remain about $4 per million British thermal units.
“Two things that I would definitely say have hurt Exxon are lower oil prices and its increasing reliance on natural gas,” said Philip Weiss, an analyst at Argus Research in New York. Weiss, whose family owns some Exxon shares, has a “buy” rating on the company.
Apple, meanwhile, is poised to increase computer sales as much as twofold over the next few years, and the iPhone business may triple in size, Wu said. If successful, the company’s new iCloud music and information-storage service, which only works with Apple products, could further lock its customers into buying the company’s devices.
Apple’s profit more than doubled last quarter to $7.31 billion on revenue of $28.6 billion. The company had record sales of iPhones and iPads -- products that didn’t exist five years ago -- and they now account for about two-thirds of revenue. Apple also has accumulated $76.2 billion in cash and other holdings.
Even so, the company’s profits are eclipsed by Exxon’s. Analysts estimate that Apple’s net income will reach almost $26 billion in the fiscal year ending in September, according to Bloomberg data. That compares with about $42 billion for Exxon in calendar 2011.
The gulf between the companies’ revenue is even larger. Apple’s sales will be $108.1 billion this fiscal year, analysts estimate. For Exxon, the projection is $481.6 billion.
Apple Chief Executive Officer Steve Jobs, who co-founded the company at the age of 21, was ousted by the board in 1985. When he returned 12 years later, Apple had run up $1.86 billion in losses over two years. It was 90 days away from bankruptcy, Jobs would later say.
He engineered the company’s comeback by honing Apple’s industrial design, tightly integrating software with hardware, and pushing into new markets, such as phones, music and tablets.
The iPhone, introduced in 2007, has become Apple’s best- selling product and turned the company into the world’s biggest smartphone maker. After winning customers away from Research In Motion Ltd. and Nokia Oyj, Apple is now sparring with Google Inc. for leadership in the market for mobile-phone software.
The company stoked recent growth with a new version of its Mac computer operating system called OS X Lion, along with updated computers. ICloud, meanwhile, will let users store, synchronize and access files from different Apple devices.
Apple’s shares are up from an adjusted $5.48 on Sept. 16, 1997, the day Jobs retook the reins as head of the company.
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