January 21st, 2000

[4:00 PM] Apple Stock Watch: Apple Blows Away Estimates and Steve gets an Airplane
by Wes George

Moments ago, Apple just released the numbers for the first quarter of 2000, wowing Wall Street with earnings $1.00 per share on revenues of $2.34 billion. Those insanely great numbers smoked analyst's expectations of $0.89 per share by full dime and are way up from $0.78 last year at this time. Apple announced that 1.35 million Macs shipped last quarter. However, as expected, gross margins slipped to 25.9% from about 28% last year.

Apple may also report a one time gain of $136 million for the partial sale of Apple's position in ARM Holdings, while the company's cash holdings, thanks to Apple's clever investments, has soared to about $6 billion dollars.

CNBC reported that Apple announced as a reward for Steve's excellent work performance on a salary of a dollar a year he'll get a Gulf Stream corporate jet.

Stay tuned for an in-depth report from the Mac Observer of all the late breaking news from Apple's conference call with CFO Fred Anderson or listen in yourself via the QuickTime broadcast today at 2:00 pm (PST).

Meanwhile, the Nasdaq had tough sledding all day held back by the sell-off in Microsoft after investors sensed weakness in the company's earnings report. It appears that Microsoft relied on liquidating parts of its stock portfolio to beat earnings estimates while demand for the Windows operating systems has slowed.

Apple advanced 2 5/8 or 2.53% to close at 106 9/16 with volume of 5 million shares traded. Apple traded up after hours to 107 1/2 until the stock was routinely halted for earnings announcement.

The Nasdaq gained 20 (0.50%) to close at 4151 on volume of 1.6 billion shares to set yet another new record high..

The Dow lost 71 points (0.62%) to close at 11489, on volume of a billion shares traded.

The S&P 500 gained 0.85 points (0.06%) to close at 1455.99. The Russell 2000 hit a new 52-week high today and is up about 6.0% in the last 4 days. As small cap market index, The Russell 2000 surge is thought to indicate that the ongoing technology rally is expanding into the much neglected small cap growth stocks, a sign that the rally still has some steam left.

The bellwether 30-year US Treasury bond traded up 11/32 to 92 14/32 lowering the yield to 6.71% from 6.74% on Tuesday.

In Apple related businesses, Adobe lost 1 1/16 to close at 62 15/16 dollars. Akamai gained 12 13/16 to close at 224 5/16, while ARM Holdings gave back 12 1/2 to close at 160. Earthlink, Apple's new Internet partner, was up a fraction to close at 47 9/16.

Apple's Power PC partners: IBM announced earnings of $1.12 per share, beating expectations by $0.06. IBM blames the Y2K corporate IT lockdown for earnings weakness and warned that the effect may persist into the first quarter of 2000, but sees blue skies ahead after that. IBM lost 13/16 to close at 114 15/16.

Motorola lost 3 1/8 to close at 140 3/4.

Apple's competitors: Microsoft blamed its disappointing earnings on slow PC sales and this hung heavy on the Wintel world today. Intel lost 2 1/16 to close at 100 1/16. Dell gained a fraction to end at 42 7/16. Gateway lost 1 13/16 to end at 56 7/8. Hewlett Packard gained 2 3/8 to close at 115 15/16, while Compaq gave back 1 1/8 to close at 29 3/4. Shares of Microsoft slumped 8 5/16 to close at 107 dollars.

AOL announced earnings of $0.09 a penny better than expectations. AOL traded up 2 11/16 to close at 63 15/16.

In other market news: In spite of higher mortgage rates, the Commerce Department reported housing construction soared 7.1% in December for the largest gain in over a year. Analysts were expecting new construction to be flat in this seasonally slow month.

The Wall Street Journal observed, "analysts note that the higher-than-expected housing starts for December shouldn't be taken as a sign of an unabated consumer spending spree. They added that seasonal factors, such as good weather and the expectation of even higher mortgage interest rates ahead, probably played a major role in year-end home buying."

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have many of these same quotes reported live (20 minute delay) on our home page. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.