Apple Inc smashed Wall Street's sales forecasts for the holiday quarter, the day after announcing its Chief Executive Steve Jobs would take leave for medical reasons. Its shares rose after hours.
The following are immediate comments from investors and analysts:
COLIN GILLIS, ANALYST, BGC PARTNERS
It's crazy good. The company is firing on all cylinders. The 7.3 million iPads, that is a great number, that is about 1 million more than people are looking for.
The iPad continues to be a game changer.
On Jobs's health: Steve is an important part of what Apple is, everyone wants to know does the company fall apart? No.
More data is always better than less (on health issues). But nonetheless they disclosed what they are going to disclose consistent with patterns.
SHAW WU, ANALYST, KAUFMAN BROS
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.
On Jobs' medical leave: It's 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. It's not as big a deal as some may make it out to be.
Steve's legacy is Apple and we think it's going to continue, they have a DNA in place, a winning culture.
STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH MORGAN
Clearly it's a huge number. You got the feeling it would be a good number when they announced Steve Jobs' medical leave earlier. They weren't going to follow that up with more bad news.
It's pretty clear this was a massive beat ... significantly better across the board and better than some of the more bullish whispers going around.
BRIAN MARSHALL, ANALYST, GLEACHER & CO
Apple's results were equivalent to IBM and very solid all around.
iPad was the most impressive. They reported more than 7.3 million iPad sales versus my expectation for 6.3 million.
On the same day, IBM beat Wall Street's expectations for the fourth quarter and forecast higher profit for this year. Its shares rose 2.8 percent after hours. [ID:nN18146899]
BRIAN MARSHALL, ANALYST, GLEACHER & CO
It was very solid all round. Service signings were very positive so this is indicative of solid trends.
The results from IBM as a tech juggernaut were very solid.
CHANNING SMITH, PORTFOLIO MANAGER, CAPITAL ADVISORS
At first glance, looks like a very solid report.
Across the board, looks like all segments performed well. One of the key issues for IBM was the services area, and I think that was a big concern for investors. It wasn't a knockout, but I think you saw revenues increased 2 percent.
What you're seeing with IBM is a company that continues to execute, they've shown tremendous earnings consistency over the last couple of years and they have excellent earnings visibility.
You had good earnings, which shows the underlying business is performing well, the segments are performing well, revenue growth was better than expectations and the forecast was better than expected.
We think that the risk-reward here is pretty attractive and we see fairly limited downside to IBM.
Looking at the valuation, roughly around 12 times, we're getting to a point after the run that we've seen that IBM is probably pretty fairly valued. I think there's upside, but I think you're looking at a return that's probably going to match the overall market.
BOB DJURDJEVIC, ANALYST, ANNEX RESEARCH
They sure blew my (revenue) forecasts out of the water.
The mainframe business is going gangbusters. Software is also up in double digits. The rate of increase is higher than I expected.
While current (services) revenues are increasing only modestly, there's indications there will be faster growth ahead because of the backlog surge. It's an indication of increased spending for the IT sector. As goes IBM, so goes corporate America these days.
In light of yesterday's news at Apple and that stock going down I think that will free up additional capital for investors to spread around other stocks that are undervalued like IBM and Intel.
(Reporting by Alexei Oreskovic, Sinead Carew, Noel Randewich, Liana B. Baker, Caroline Valetkevitch and Jennifer Saba)