Blockbuster sales of the iPad and iPhone fueled better-than-expected quarterly results and forecasts from Apple Inc, assuaging investors' fears after CEO Steve Jobs' abrupt decision to take medical leave.
Shares in Apple leapt almost 4 percent after hours following a brief trading suspension. It later backtracked to stand about 2 percent higher, making up the majority of the losses incurred after Jobs' surprise announcement.
An across-the-board show of strength came as Wall Street displayed increasing confidence in the management team surrounding Jobs, who seeks medical treatment for an unspecified condition for an indefinite time.
Investors were widely expecting a strong performance from Apple over the holidays, and the company did not disappoint.
All key product lines exceeded expectations. The company sold 16.2 million iPhones in the quarter, up 86 percent. It also had strong sales of 7.33 million iPads, and Mac sales rose 23 percent on a unit basis to 4.1 million units.
The iPad numbers were huge. The production issues people were worried about are obviously behind and the demand for a new product continues to be strong, said Kaufman Bros analyst Shaw Wu.
Jobs' role is important but at the same time, as the company continues to execute, it becomes more secondary. The way Steve thinks, his methodology, his sense of style: frankly, a lot of it has been ingrained into the Apple culture.
Apple, known for its conservative forecasts, issued on Tuesday an outlook above analysts' targets. It expects earnings for the March quarter of $4.90 a share on revenue of $22 billion.
Wall Street had been predicting a profit of $4.47 a share on revenue of $20.8 billion.
THINGS NOT FALLING APART
The world's largest technology company by market capitalization said on Monday that Jobs, 55, was taking a medical leave of absence without specifying a return date or detailing his condition.
But aside from its chieftain's health, the company is entering 2011 on a roll, a cash-generating machine with surging sales across its product lines. In coming months, the company's iPhone will go on Verizon Wireless' network, further accelerating sales of the smartphone.
And at more than 7 million sold versus the roughly 6 million expected, Apple's iPad has not only virtually created the tablet market, but has become a significant slice of business for the consumer electronics powerhouse.
Apple reported earnings for the fiscal first quarter ended December 25 of $6 billion, or 6.43 cents a share, up 78 percent from a year-ago net profit of $3.4 billion, or $3.67 a share.
Analysts on average were expecting a profit of $5.40 a share, according to Thomson Reuters I/B/E/S.
Revenue rose 71 percent to $26.7 billion, much better than Wall Street's forecast for revenue of $24.4 billion.
The results helped make up for a roughly 2 percent loss in Apple's share price during regular trading on Tuesday, driven by concerns that Jobs' eventual departure would derail his company's famed innovation train.
Steve is an important part of what Apple is. Everyone wants to know, does the company fall apart? No, said BGC Partners' analyst Colin Gillis.
(Editing by Edwin Chan and Richard Chang)