What recession? Apple's profits rise

Apple Inc. shattered analysts' estimates for profit and sales last quarter, defying the worst U.S. holiday shopping season in at least four decades.

Net income for the period ended Dec. 27 climbed 1.5 percent to $1.61 billion, or $1.78 a share, from $1.58 billion, or $1.76, a year earlier, Apple said after markets closed on Wednesday. Sales rose 5.8 percent to $10.2 billion. Analysts surveyed by Bloomberg had estimated profit of $1.39 a share and sales of $9.76 billion.

Apple updated its Macintosh notebook computers, revised its iPod designs and began selling the iPhone in more overseas markets to help boost sales over the holidays. The company is operating without the daily oversight of Chief Executive Officer Steve Jobs, who is on medical leave through June.

U.S. regulators are examining Apple disclosures about Jobs' health problems to ensure investors weren't misled, a person familiar with the matter said. The Securities and Exchange Commission's review doesn't mean investigators have seen evidence of wrongdoing, the person said, declining to be identified because the inquiry isn't public.

Commenting on the quarterly results, Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis, said "The bottom line is that even in a bad market, people want Apple products. Whatever money people have, they're spending on Apple."

Apple sold 4.36 million iPhones in the quarter, a record 22.7 million iPods and 2.52 million Macs. Analysts were anticipating 5 million iPhones, 18.6 million iPods and 2.4 million Macs, Munster said.

Apple introduced the iPhone in 2007, with a faster version debuting last July.

The shares of Apple, based in Cupertino, Calif., rose $7.87 to $90.70 in late trading Wednesday after closing at $82.83 on the Nasdaq Stock Market. They declined 57 percent last year.

Jobs, who had successful surgery to remove a rare type of pancreatic cancer in 2004, appeared increasingly thin and frail throughout 2008. Last week, nine days after saying he would continue to lead the company while seeking a "relatively simple and straightforward" treatment for a hormone imbalance, he announced he would take the medical leave because his health issues were "more complex" than he originally thought.

Chief Operating Officer Timothy Cook, who filled in for Jobs during a monthlong leave in 2004, is handling day-to-day operations at Apple.