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Apple, Verizon Defy Analysts' Expectations

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Yesterday, AT&T reported that the company held strong despite losing iPhone exclusivity and the introduction of the Verizon iPhone. Revenue was up in the first quarter, and 5.5 million subscribers signed on -- a company record.

But AT&T wasn't the only one enjoying a healthy first quarter. Apple and Verizon reported solid earnings for the start of 2011, and both exceeded analysts' forecasts.

First up, Apple. Steve Jobs and his merry band of touchscreen gurus shipped 18.65 million iPhones -- beating estimates of 16 million. Net profit fell just shy of $6 billion, or $6.40 a share, and revenue skyrocketed to $24.67 billion -- an increase of 83%. Estimates were at $5.37 in earnings and $23.4 billion in revenue.

Macs computers continued to sell well. Cupertino reported 3.76 million Macs sold, which is an increase of 28% from the same time last year.

Apple's outlook is solid with second quarter earnings of $5.03 a share on revenue of roughly $23 billion.

The only blemish on the otherwise glowing earnings call was iPad sales, which fell short of estimates at 4.69 million sold. However, Apple Chief Financial Officer Peter Oppenheimer told Reuters, "We sold every iPad 2 we could make and the demand was stunning." The company also noted the flood of customers still on a waiting list for the iPad 2.

Also benefiting from a new iPhone model in February was the network which carried it: Verizon. The provider reported a massive 2.2 million iPhone activations in under two months since the launch. Net income enjoyed a boost of $0.51 a share to hit $1.44 billion. The company edged out analysts' predictions of $0.50 a share.

Service revenues increased 6.3% year-over-year and data revenues rose a healthy 22.3%.

Verizon Wireless reported 104 million total connections on its network -- a 6.1% increase year-over-year. It currently is the largest network in the states -- a claim that will be usurped if the FCC approves AT&T's acquisition of T-Mobile.

According to the company's press release, Verizon's cash flow outlook for 2011 "remains strong. Adding, "There is no change regarding the anticipated 2012 timing of a Verizon Wireless dividend to its parent companies."

(See also: Apple Secretly Tracking iPhone, iPad Users' Location and AT&T Holds Strong Despite Verizon's iPhone)

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POSITION:  No positions in stocks mentioned.