Apple Juiced

Updated from 7:16 a.m. EDT

Apple(AAPL) surged nearly 6% Thursday following its latest earnings blowout, clearing the $100 mark for the first time.

The news came a day after the company blew past analysts' second-quarter earnings expectations as margins expanded sharply. Shares rose $5.47 to $100.82.

The company said Wednesday that net income rose 87% to $770 million, or 87 cents a share, compared with $410 million, or 47 cents a share, the year before.

Analysts polled by Thomson First Call had been expecting EPS of 64 cents.

Revenue grew nearly 21% to $5.26 billion, above expectations of $5.17 billion in what Apple CFO Peter Oppenheimer called the "best March quarter in Apple's history."

Apple shipped 1.52 million Macintosh computers and 10.5 million iPods during the quarter, representing 36% growth in Macs and 24% growth in iPods over the year-ago quarter.

Gross margin was 35.1%, up from 29.8% in second quarter 2006.

Mac products and services comprised 56% of total revenue and grew 36% over the year-ago quarter. More than 50% of customers buying Mac in Apple stores were new users, said Apple.

Sales from Apple retail stores grew 34% over the same period last year.

The company opened seven new stores in the quarter bringing total stores worldwide to 177. Average revenue per store was $5 million and the company now has 21 stores outside the U.S.

International sales accounted for 43% of the quarter's revenue.

Apple said it plans to open a third retail store in Manhattan, and two internationally in Sydney and Glasgow.

Music products and services were 44% of total revenue and grew 25% over the same quarter last year. Specifically, the iPod Shuffle gained in popularity because of the introduction of four new colors during the quarter.

For the third quarter, Apple said it expects to earn 66 cents a share on revenue of $5.1 billion. As is Apple's practice, that's lower than Street expectations of $5.4 billion in revenue and earnings of 67 cents a share.

Apple expects third-quarter gross margins to 32%. The company is targeting gross margin of 27% to 28% on a longer term, said Oppenhemier. "We see commodity pricing such as NAND flash and memory trending up in June," he told analysts during a conference call.

Separately, Apple board members released a statement reiterating their "complete confidence" in CEO Steve Jobs over the stock options backdating issue.

"Steve Jobs cooperated fully with Apple's independent investigation and with the government's investigation of stock option grants at Apple," the statement said. "The SEC investigated the matter thoroughly and its complaint speaks for itself, in terms of what it says, what it does not say, who it charges, and who it does not charge."

Board members Bill Campbell, Millard Drexler, former U.S. Vice President Albert Gore Jr., Arthur D. Levinson, Google(GOOG) CEO Eric Schmidt and Jerry York signed the statement.

On Tuesday, former Apple CFO Fred Anderson settled backdating-related charges brought by the Securities and Exchange Commission. But Anderson in his statement said Jobs knew of the backdating and its implications.

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