Surging iPod sales fuel Apple’s gains

Article Excerpt

APPLE COMPUTER INC. $74 (Nasdaq symbol AAPL; WSSF Rating: Extra risk) has risen eight-fold for us since we first recommended it at $9.50 in November 2000. Much of this rise is due to the huge success of its iPod digital music players. The company sold 14 million iPods in its first fiscal quarter ended December 31, 2005, up from 4.6 million a year earlier. That helped lift Apple’s revenue by 65.7% in the quarter, to $5.8 billion from $3.5 billion. Per-share income rose 85.7%, to $0.65 from $0.35. Many iPod buyers are also switching to Apple’s Macintosh computers, whose sales grew 20% in the quarter. Computer sales could slow down in the next few months as buyers wait for faster models that use chips made by Intel. Buyers may also hold off until they can get software that takes full advantage of these new chips. Apple now trades at 35.1 times the $2.11 a share it will probably earn in fiscal 2006. This…

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