Apple Inc.'s shares rose more than 8 percent on Thursday after stronger-than-expected quarterly profits prompted a number of analysts to raise their price targets on the stock.
Apple, propelled by strong sales of its Macintosh computer, posted a 73 percent rise in quarterly profit in its report after the stock market closed on Wednesday. It also said it would sell 1 million iPhones by the end of its current quarter, and reiterated its goal of selling 10 million of the devices globally in 2008.
That triggered a strong rise in the stock in early trading Thursday, with shares up $10.49, or 7.6 percent, at $147.75 on the Nasdaq. Apple's shares had already jumped 62 percent since the start of the year, when Chief Executive Steve Jobs unveiled the iPhone.
Combining a wireless phone, Web browser and media player that offers service over AT&T Inc.'s mobile network, the iPhone is Apple's attempt to build a third product line that will equal its computer and iPod businesses. It went on sale on June 29.
With the iPhone, iPod and Macintosh, a number of Wall Street analysts see Apple stock poised for further gains judging from the string of price target upgrades that followed the earnings report.
Among the brokers that raised their price targets on the company: Credit Suisse increased the target to $185 from $140; WR Hambrecht increased the target to $172 from $125; UBS increased the target to $175 from $160; and Needham raised the price target to $170 from $135.
Another firm, Bear Stearns, wrote in a note to clients: Despite iPhone hype, we note that Apple is much more than just iPhone, particularly given strengthening Mac momentum, which can benefit from 'iPhone halo effect.'
Analyst Andrew Neff continued: We see the Apple story shifting from a dependence on one 'hit' product with little sense of what could follow, to a broader array of products with multiple drivers (including) iPod, Mac, iPhone, video.
Apple's net income for its fiscal third quarter that ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents per share, a year earlier.
Apple had been expected to earn $644.4 million, or 72 cents per share, according to the average analyst forecast on Reuters Estimates. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier and more than the $5.29 billion expected by Wall Street.