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Biz Break: Apple predicts record holiday season as iPhones, Macs sell fast [San Jose Mercury News](San Jose Mercury News (CA) Via Acquire Media NewsEdge) Oct. 20--Today: Apple beats expectations for the third quarter and predicts record sales during the holiday season. Also: ShoreTel receives an acquisition offer, IBM pays a Silicon Valley firm to acquire its chips division. The Lead: Apple rakes it in and looks ahead to more Apple raked in record earnings in the third quarter and uncharacteristically predicted a stronger holiday season than analysts Monday, pushing the Cupertino company's stock higher and setting up high expectations for iPhone sales. The world's most valuable company reported profits of $8.5 billion, or $1.42 a share, on sales of $42.1 billion, record-breaking results that easily beat analysts' estimates of $1.31 per share on revenues of $39.85 billion, according to Thomson Reuters. Gains were fueled by sales of 39.3 million iPhones -- ahead of analyst estimates despite only selling the new versions of the smartphones for the last two weeks of the quarter -- and record Mac sales of 5.5 million that helped make up for a decline in iPad sales. "Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus," CEO Tim Cook said in Apple's official announcement. "With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple's strongest product lineup ever." The holidays will be crucial for Apple, which announced new iPad and Mac offerings last week to add to new iPhones on wish lists for the biggest shopping quarter in the United States. The company predicted sales in the current quarter of $63.5 billion to $66.5 billion, suggesting Apple will beat previous estimates that were around the low end of the figures provided Monday, unusual from a company known for underwhelming forecasts that are promptly smashed by actual performance. Apple's optimism is likely to fuel larger estimates for iPhone sales, with many analysts already expecting that Apple will sell as many smartphones as it can produce and get into customers' hands during the holidays, an outlook Cook fed into during Apple's conference call, saying the new iPhone is "selling faster than even we thought." "As long as they can deliver, they'll sell as many (iPhones) as they can make in this quarter." Tim Bajarin, president of Creative Strategies, told Bloomberg News. Bajarin's partner at Creative Strategies, Ben Bajarin, predicted not long after the results hit that Apple could sell as many as 70 million iPhones this quarter if supply allows, which would be a gigantic increase from the record 51 million smartphones Apple sold last holiday quarter. While the iPhone continues to pull in massive sales and profits, the iPad tablet struggles: Sales were down 13 percent from the same quarter a year ago, which followed Apple's pattern from this year of introducing new iPads at the end of the quarter. Apple hopes that it can find growth for the iPad by selling them to businesses, with a recent partnership with IBM highlighting its efforts. "The level of interest from the corporate world has been incredible," Apple Chief Financial Officer Luca Maestri told Reuters in an interview Monday. Apple stock added 2.1 percent to close at $99.76 in anticipation of Monday's results, and shares added more to top $101 in after-hours trading. SV150 market report: Tech stocks bounce as ShoreTel gets an offer Wall Street continued to bounce back Monday from a severe downfall to kick off the fourth quarter and Silicon Valley tech stocks easily outgained broad-based indexes. The SV150 gained 1.2 percent Monday with a big boost from Sunnyvale-based ShoreTel after the telecommunications company's rival, Mitel, publicly disclosed that it is seeking to buy the company for $8.10 a share. ShoreTel stock shot up by easily the largest percentage in the SV150, gaining 17.1 percent to $7.62, despite already turning down the offer before Mitel made it public. In a release, ShoreTel said its board "will carefully review and evaluate the proposal and determine the course of action that it believes is in the best interest of the company's stockholders." IBM did not do as well after its earnings report as its new enterprise partner, falling 7.1 percent to $169.10 while actually paying Milpitas chipmaker Globalfoundries $1.5 billion to take Big Blue's semiconductor business. eBay lost one of its most famous directors, Marc Andreessen, who left after a public spat with activist investor Carl Icahn; the San Jose e-commerce company increased 2.6 percent to $49.20 while launching direct sales in Russia. Facebook added 1.3 percent to $76.94 while filing suit against law firms who backed a man claiming part-ownership of the Menlo Park social networks, and rival Twitter gained 4 percent to $50.70 while hoping to make nice with software developers. Yahoo is next up on the earnings parade, with CEO Marissa Mayer expected to lay out the company's strategy Tuesday, and the Sunnyvale Web firm's stock gained 2.2 percent to $39.28. Tesla Motors advanced 1.3 percent to $230.47 while kicking off online sales in China on Tmall, a division of e-commerce giant Alibaba. Up: SolarCity, Twitter, SunPower, eBay, Yelp, Yahoo, Apple, EA, SanDisk, GoPro, Google Down: VMware, AMD, Pandora, Cisco, Hewlett-Packard, NetApp The SV150 index of Silicon Valley's largest tech companies: Up 18.28, or 1.21 percent, to 1,528.24 The tech-heavy Nasdaq composite index: Up 57.64, or 1.35 percent, to 4,316.07 The blue chip Dow Jones industrial average: Up 19.26, or 0.12 percent, to 16,399.67 And the widely watched Standard & Poor's 500 index: Up 17.25, or 0.91 percent, to 1,904.01 –––– Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510. ___ (c)2014 San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT Information Services |