Outlook, upgrades boost Apple shares

Apple Computer (Nasdaq: AAPL) shares surged 12 percent Thursday after the company issued a bullish outlook for its fiscal first quarter and analysts responded with upgrades.

In morning trading, Apple shares jumped 7 3/32 to 71 1/8 and was among the most active stocks on the Nasdaq. CS First Boston and Warburg Dillon Read reiterated "buy" ratings and raised their 2000 earnings estimates on Apple. Donaldson Lufkin and Jenrette upgraded the stock to "top pick'' from "buy."

Apple pocketed a fourth quarter profit of $90 million, or 51 cents a share, on sales of $1.34 billion. First Call consensus expected the PC maker to earn 45 cents a share in the quarter. Estimates were lowered following a mid-September profit warning -- Apple couldn't ship enough G4 Power Macs because of chip shortages from Motorola (NYSE: MOT).

The earnings were nice, but Wall Street was focused on the outlook for Apple and liked what it heard.

Apple, with a backlog of more than $700 million, should be poised to serve up 20 percent to 25 percent in revenue growth in the first quarter, according to financial chief Fred Anderson.

"Next quarter will be the first in which we will have all four product families" in full production, Anderson said. "Units shipped and revenue will be up significantly from the prior and year-ago quarter quarters."

CS First Boston raised its 2000 earnings estimate to $3.20 a share from $3.15 a share. Warburg Dillon Read upped its 2000 earnings projection to $3.40 a share from $3.15 a share.