Apple quarterly profit beats expectations

Apple Inc. said Wednesday its profit in the holiday quarter edged up 2 percent and beat Wall Street's expectations, but the iPod and iPhone maker's predictions for the current quarter came in lower than analysts were predicting.

Earlier in the day, The Wall Street Journal reported on its Web site that the U.S. Securities and Exchange Commission will open an inquiry into Apple’s disclosure on the health of the technology company’s Chief Executive Steve Jobs.

The first question for executives in a conference call regarded the health of Jobs, who announced a week ago that he would take a six-month medical leave.

Apple gave no new details, but Tim Cook, the chief operating officer who is handling day-to-day operations in Jobs' absence, attempted to assure analysts that Apple will continue to do well no matter who's in charge.

"The values of our company are extremely well entrenched," Cook said. "We believe that we're on the face of the Earth to make great products, and that's not changing."

Apple’s co-founder Jobs said last week he is taking a medical leave days after the cancer survivor tried to assure investors and employees his recent weight loss was caused by an easily treatable hormone deficiency.

Apple’s shares have surged and crashed over the last year in step with rumors or news about the CEO’s health and his gaunt appearance. While the top executive’s health is an issue for investors in any company, at Apple the level of concern reaches fever pitch because Jobs has a hand in everything from ideas for new products to the way they’re marketed.

To bring any case, the SEC would probably have to show the company tried to benefit by withholding information about an unambiguous diagnosis, Peter Henning, a former federal prosecutor and SEC lawyer told Bloomberg news.

Spokespeople for both Apple and the SEC declined requests for comment from Bloomberg.

The SEC doesn't require companies provide health condition of their executives. But one observer told Bloomberg that Apple, because of Job's rock-star status among the company's customers, makes it a different case.

“Steve Jobs himself thinks the Steve Jobs mystique is of value — otherwise, why not have other people introduce those products over the past 10 years?” said Jeffrey Sonnenfeld, associate dean of the Yale University School of Management. “Steve Jobs, Martha Stewart and Donald Trump have all made the boss the brand. The boss is the brand at Apple.”

In the fiscal first quarter that ended Dec. 27, Apple's earnings rose to $1.61 billion, or $1.78 per share. In the comparable period last year, profit was $1.58 billion, or $1.76 per share.

Sales improved 6 percent to $10.2 billion.

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