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Apple (AAPL) Rumors – Jobs Denies 7-in. iPad

Here is your daily Apple  (NASDAQ: AAPL) stock news and rumors for Oct. 19, 2010. The big news this week is, of course, Apple earnings. But it’s worth noting that Steve Jobs also made waves by denying (again) the 7-inch iPad and that AAPL is expanding its retail space in 2011.

AAPL Reports Fourth-Quarter Profit Gains But Stock Stumbles After Missing Target: It was a day of mixed emotions for AAPL shareholders. The Cupertino, Calif. company reported fourth-quarter earnings yesterday, seeing a staggering 70% growth in profits, up to $4.31 billion or $4.64 per diluted share. Total revenue for the quarter was $20.34 billion. Apple is expecting revenue and profits to grow in the first fiscal quarter of 2011, projecting $23 billion in revenue. The impressive $5.7 billion in cash flow in the fourth quarter came from healthy sales of the company’s Mac computers. AAPL sold 3.89 million Macs over  its  last quarter, a 27% increase year-on-year that came thanks to a surge in student sales. AAPL’s other big success story was the iPhone. “Antennagate” had less of an impact on the iPhone 4’s performance than expected; 14.1 million iPhones were sold in Apple’s last quarter, a 91% increase year-on-year. As Piper Jaffray analyst Gene Munster predicted last Frday, though, iPad shortages had a significant impact on Apple’s business. Just 4.19 million iPads shipped in the last quarter, missing even Munster’s expectation of 4.5 million. The iPad shortages contributed to Apple missing its profit projection of $4.80 per share for the quarter.  Despite huge profits and strong iPhone sales, Apple shares are down today, sliding by more than 5% to just above $300 per share. Apple has reportedly fixed its supply woes for its popular mobile devices, so shareholders can weather the current dip and expect a strong first quarter in 2011.

Steve Jobs Burns Google, Research in Motion and Denies Existence of 7-inch iPad: Apple CEO Steve Jobs chimed in during Apple’s earnings conference call yesterday, saying that he, “couldn’t help dropping by for our first $20 billion quarter.” The infamous technologist didn’t just listen in, but jibed at his company’s major competitors throughout the call. Jobs first pointed out that the iPhone, having sold 14.1 million units over the course of the last quarter, breezed past Research in Motion (NASDAQ: RIMM) in the smartphone market. “We’ve now passed RIM. I don’t see them catching up in the foreseeable future. It will be a challenge for them to create a mobile software platform and convince developers to support a third platform.” Jobs’ comments begrudgingly acknowledged the growth Google (NASDAQ: GOOG) has seen with its  Android mobile software platform in the past twelve months. He went on to discuss Google’s operating system and discussed the perception of Apple’s iOS as being more restrictive than Android. “Google loves to characterize the iPhone as closed. We see this as disingenuous and clouding the difference.” Jobs then went on to blast the variety of 7-inch tablets entering the market in the next six months from Research in Motion, Dell (NASDAQ: DELL) and others, saying, “(The 7-inch screen size) isn’t sufficient to create great tablet apps. We think the 7-inch tablet will be dead on arrival, and manufacturers will realize they’re too small and abandon them next year.” That should be the final nail in the coffin of rumors regarding a 7-inch iPad.

Apple Expands Retail Operations in 2011: After reporting its quarterly earnings yesterday, Apple announced its  plans to increase its  retail operations with as many as 50 new stores worldwide by the end of next year. Apple currently operates 317 stores worldwide and recently opened new flagship locations in Paris, Beijing, Shanghai and London. After steady growth in recent years, Apple has spent the first half of 2010 developing the 24 new international retail locations that opened in the next quarter. The company did not reveal how many of the stores planned for 2011 would be opened in the United States and how many would open abroad.

As of this writing, Anthony Agnello did not own a position in any of the stocks named here.

Article printed from InvestorPlace Media,

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