Apple shares extend decline , concern for InTel transition
Mon Feb 6, 2006 5:53 PM ET
(Adds closing share price, details)
SAN FRANCISCO, Feb 6 (Reuters) - Shares of Apple Computer Inc. (AAPL.O: Quote, Profile, Research) fell 6.3 percent on Monday, extending a slide since reaching a 52-week high on Jan. 13, on concerns about weaker sales during the company's transition to Intel chips for its computers.
"The stock has been under some selling pressure for the past week," said Shaw Wu, an analyst at American Technology Research who has a "buy" rating on Apple shares.
Wu said some investors may be concerned about Apple's planned transition to Intel Corp. (INTC.O: Quote, Profile, Research) processors. Apple had been using chips made by International Business Machines Corp. (IBM.N: Quote, Profile, Research) for its Macintosh computers, but its shift to Intel chips caused it to lose some holiday-quarter sales, Apple Chief Financial Officer Peter Oppenheimer said in January.
Shares of Apple have been trading at a premium to competitors. Apple's stock price is about 32 times estimated 2006 earnings, compared with a price-to-earnings ratio of 19 for Dell Inc. (DELL.O: Quote, Profile, Research), the No. 1 personal computer maker, and a multiple of 16.7 for Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research)
Apple shares took a hit after the Cupertino, California-based computer maker on Jan. 18 forecast current-quarter results below analysts' estimates.
The shares had surged earlier in January after the company introduced new Intel-powered desktop and notebook computers and reported a 63 percent jump in holiday quarter sales, fueled by Apple's popular iPod portable music players.
Apple shares more than doubled in 2005 after tripling in 2004 on the success of the company's iPod music players. The company has sold about 42 million iPods since their introduction in October, 2001, and Apple has about 75 percent of the U.S. market for digital music players
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