APPLE Scores Big – Wait Till iPhone Comes to You

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Apr 26 2007
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Stock price of Apple Inc.’s (Nasdaq: AAPL, stock) soared above $100 for the first time in its’ history after the iPhone maker announced numbers which exceed Wall Street expectations with quarterly profits that jumped 88 percent on strong sales of iPod players and Macintosh computers.
I would think the after-hours trading which saw the stock-price gained more than 7 percent is mainly due to the “double happiness” effect. The great quarterly profit merely started the engine but the vote of confidence by the board (which includes former Vice President Al Gore) in defending CEO Steve Jobs from new accusations of the company’s backdating of stock options is the turbo that propels the stock skyrocket above $100 a share. That’s the reason why the shares of Apple which closed at $95.35, up $2.11 (2 percent) on the Nasdaq Stock Market, leaped to $102.40 in after-hours trading.
For the first three months of the year, Apple said it earned $770 million, or 87 cents per share, up from $410 million, or 47 cents per share, in the year-ago period. Sales were $5.26 billion, up 21 percent from $4.36 billion last year. According to Thomson Financial, analysts, on average were looking for earnings of 64 cents per share on sales of $5.17 billion.
Apple said it shipped 1.5 million Macintosh computers and more than 10.5 million iPods during the quarter. Wait till you see the profit when iPhone comes and rule (well, not exactly eat-up in one shot but gradually) the market. While this is the good news to my investment portfolio, the same cannot be said on Akamai stock after earning announcement.
Akamai Technologies Inc. (Nasdaq: AKAM, stock) announced first-quarter profit that surged 67 percent on solid revenue growth. But investors were unimpressed, and sent the company’s shares sharply lower in the final minutes of trading on the Nasdaq Stock Market. So now you know why it’s so damn hard to satisfy these market makers who usually are the market mover.
Net income for the quarter was $19.2 million, or 11 cents per share, up from $11.5 million, or 7 cents per share, for the first quarter of 2006. Excluding certain expenses, income in the latest quarter was $50.7 million, or 28 cents per share.
Revenue for the quarter was $139.3 million, up 53 percent from $90.8 million in the year-ago period. Analysts expected earnings of 28 cents per share on $138.8 million in revenue, according to a Thomson Financial survey. Akamai shares mostly held steady throughout the day, but after the company released its earnings in late afternoon, they dived $5.62, or 10.3 percent, to finish at $48.97. Depending on the chart behavior during the first 45-minutes of trading, I might decide to reverse my position or convert it into spread. The stock could goes into worse territory since those investors who bid-up the Call options might decide to cover their position.
The same story goes to F5 Networks, Inc. (Nasdaq: FFIV, stock). My position is in Put option (when it was bid-up the same way like Akamai) mainly due to the technical analysis that shows a stagnant rally since early of the year (2007). $80 bucks per share seems to be the strong resistance with $70 as the next resistance – the 1-year chart shows a very tired bull losing steam to the bear.

And here you have the joker (don’t get me wrong, I still like this company) that jumped $9.68 (14.65 percent) in after hours trading to $75.75, following an earlier close at $$66.07 on the Nasdaq Stock Market. F5 recorded second quarter net income of $20 million, or 47 cents per share, up from $16.1 million, or 39 cents per share. Sales totaled $127.6 million for the quarter ended March 31, up from $94.1 million in the same period of 2006. If my fear is anything to go by, F5 Networks might jump even higher today as the short started to cover their position.

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