Apple Had a Happy Holiday

Execs Confident Despite Jobs' Leave; Cite 'Wicked Smart' Team

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NEW YORK ( -- Apple turned in a strong holiday sales season as executives tried to reassure the market that the company would be fine even if CEO and co-founder Steve Jobs isn't able to return from medical leave.

Chief Operating Officer Tim Cook is in charge of Apple's day-to-day operations in Steve Jobs' absence.
Chief Operating Officer Tim Cook is in charge of Apple's day-to-day operations in Steve Jobs' absence.
"The values of our company are extremely well-entrenched; we believe we were put on the face of this earth to make great products," said Chief Operating Officer Tim Cook, who is managing the company in Mr. Jobs' absence. "Regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well."

Last week Mr. Jobs announced he would take a leave of six months from the company to deal with nebulous health issues he described as a "hormone imbalance." Mr. Jobs was treated for pancreatic cancer in 2004.

On the earnings call, Apple Chief Financial Officer Peter Oppenheimer declined to elaborate on Mr. Jobs' condition, but made it clear Mr. Cook is in charge until he can return. "Steve is the CEO of Apple and plans to remain involved in strategic decisions. Tim [Cook] is in charge of day-to-day operations."

Record quarter
The good news is Apple has the benefit of coping with the condition of its iconic CEO amid sales that don't appear to have been hurt much by the current economic climate. The company had a record quarter from strong iPod and Mac computer sales, bringing revenue of $10.17 billion, up 6% from last year, and $1.61 billion in net profit, up 2%.

It sold a record 22.7 million iPods, a 3% increase over last year; 2.5 million Mac computers, a 9% increase; and 4.4 million iPhones, an 88% increase over 2007. The only disappointing number was iPhone sales, expected by some analysts to reach 5 million units. Apple shares, battered by concerns over Mr. Jobs' health, rebounded 8.5% in after-hours trading.

As good as sales were over the holidays, Apple offered conservative earnings guidance for the first quarter. "The fear is the economy may slow down the adoption of smart phones, because of higher monthly fees on contracts," Mr. Cook said.

First-quarter revenue was expected to be between $7.6 billion and $8 billion, a conservative outlook due to the fact, as Mr. Oppenheimer said, that "visibility is low," and short of Wall Street's expected $8.2 billion.

Mr. Cook said the recent distribution deal with Walmart is helping the company reach consumers in areas where it doesn't have an Apple store.

Mr. Cook took pains to reassure investors that Apple has the bench talent to survive the potential loss of its iconic CEO. "There is an extraordinary breadth and depth of talent" in Apple's management ranks, he said, adding that "they're all wicked smart."

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