Apple shares soar following historic earnings announcement

The stock is on the upswing this morning, pushing the market cap to the range of $415 billion and returning Apple to the status of the world's most valuable public company.

After seeing Apple post a hugely successful fiscal first quarter yesterday, investors are on a spending spree.

Apple's stock soared in early trading today, surging nearly 7 percent to $449.33 after opening a touch higher still at $454.44, as investors moved to take quick advantage of the anticipated strong demand for the company's shares. At that price, Apple's market capitalization stands at about $418.8 billion, doubling Wal-Mart's market value and just beating out Exxon Mobil's.

Apple's robust performance today stems from the record-breaking sales the company generated in the fourth quarter (its fiscal first quarter). During the period, Apple posted $46.33 billion in revenue and a record profit of $13.06 billion. iPhone sales jumped 128 percent year over year to settle at 37.04 million units, while iPad sales rose 111 percent to 15.43 million units. Apple's Macs got into the mix, too, soaring 26 percent to 5.2 million units sold.

But Apple's value to shareholders goes beyond just sales and profits. The company carries no debt on its books, according to its latest Securities and Exchange Commission filing, and it has $97.6 billion of cash on hand. In other words, it has no real liabilities to worry about, and it has all the cash it needs to do, well, anything it wants.

The only question is, what will the company actually do with it? For years now, investors and industry observers have been calling on Apple to spend some cash--on dividends back to shareholders, for example--but so far, it has kept the vast majority of those funds in its coffers.

During yesterday's earnings call, both Apple CFO Peter Oppenheimer and CEO Tim Cook said that they are "examining all uses" of the cash, including improving the supply chain and engaging in strategic acquisitions. However, Oppenheimer cautioned that Apple is "not letting it burn a hole in our pockets."

Regardless of what Apple does with its cash, analysts, who are most concerned with the company's health and future performance, are extremely bullish on the company's shares. Sterne Agee analyst Shaw Wu wrote in an investors note today that Apple is still a worthy buy for investors, and could see its stock price jump to $550 within the next 12 months. JP Morgan analyst Mark Moskowitz is even more convinced of Apple's potential, saying he believes the company's shares could soar to $625 by the end of the year.

"We think that underlying strength related to iPhone and iPad market penetration has staying power, which is why we are lifting our Dec 2012 price target to $625, up from $525," Moskowitz wrote to investors. "In our view, the December-quarter beat was stunning on many levels."

Update 7:31 a.m. PT to include more details.

 

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