Court rules Obama recess appointments unconstitutional

WASHINGTON — A federal appeals court, dealing a defeat to President Obama, has sharply limited the chief executive’s power to bypass the Senate and to make temporary “recess” appointments to fill vacant slots in government agencies.

The Court of Appeals for the D.C. Circuit, in a 3-0 ruling,  said the president can make recess appointments only when the Senate has formally adjourned between sessions of Congress, not when lawmakers leave Washington for a brief break.

The Obama administration is almost certain to appeal the decision to the Supreme Court. But if the ruling stands, it strengthens the power of the Senate’s Republican minority at the expense of Obama and the Democrats.

PHOTOS: President Obama’s second inauguration

During his first term, Senate Republicans, led by Minority Leader Mitch McConnell (R-Ky), refused to approve Obama’s nominees for several agencies, including the National Labor Relations Board and the new Consumer Financial Protection Agency created in the wake of the Wall Street collapse of 2008. McConnell could rely on the filibuster rule by which the minority can block a vote by the majority.

In response, Obama invoked his power under the Constitution “to fill up all vacancies that may happen during the recess of the Senate.” Obama used this authority last January to appoint several new members to the National Labor Relations Board, ensuring the group had the necessary three members to make decisions. In addition to the NLRB appointments, Obama also installed Richard Cordray as director of the Consumer Financial Protection Bureau at the same time.

Business groups and Senate Republicans challenged the move, arguing the Senate was not truly in recess last January when it was out of session for several days.

In Friday’s decision, Chief Judge David Sentelle ruled for the challengers and said a “recess” refers to the break when Congress formally adjourns after a two-year session.

“An interpretation of 'the Recess' that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction. This cannot be the law,” said Sentelle, an appointee of President Reagan. He was joined by Judges Karen Henderson and Thomas Griffith, who are also Republican appointees.

PHOTOS: President Obama’s past

Cordray’s appointment is being challenged in U.S. District Court in Washington, D.C., in a separate lawsuit by a Texas bank and two free-market advocacy groups. They also claim the appointment was unconstitutional because the Senate was not in a formal recess. The suit is pending.

On Thursday, Obama renominated Cordray to the five-year term as director of the 2-year-old agency. Cordray’s recess appointment expires at the end of the year.

Obama said Thursday that Cordray was qualified for the position, but “he wasn’t allowed an up or down vote in the Senate, and as a consequence, I took action to appoint him on my own.”

Staff writer Jim Puzzanghera contributed to this report.

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DUST 514, Online Shooter Set in EVE Online Universe, Enters Open Beta

First announced in 2009, CCP Games’ online first-person shooter tie-in to its popular sci-fi MMO, EVE Online, was finally released as an open beta on Tuesday. Called DUST 514, it allows PlayStation 3 owners to play in the same world as EVE Online, fighting ground battles while EVE Online pilots contest star systems. The results of DUST 514 matches affect worlds and in-game corporations in EVE Online, and EVE Online players can even use starship weaponry to bombard the planets DUST 514 matches take place on.

Introducing New Eden

EVE Online and DUST 514 take place in a distant star cluster called New Eden. In a scenario sort of like ” Stargate” meets ” Star Trek: Voyager,” human space explorers found themselves trapped in New Eden, impossibly far from Earth, after using a one-way portal. Many thousands of years later, their descendants have formed completely new nations and ethnicities, and fight each other in space and on the ground over resources or ideology.

The most difficult MMO ever?

Widely regarded as very difficult — a popular infographic depicts EVE’s learning curve as a sheer cliff littered with stick figure bodies — EVE Online is also known for its byzantine politics, which take place completely between players. Player-run alliances sink years into building enormous spacecraft, which can vanish in a single battle or thanks to one person’s treachery.

A study in contrasts

DUST 514 is only available on the PlayStation 3 console, whereas EVE Online is for Windows PCs and Macs. DUST 514 is free to play and has no monthly fee, while EVE costs money to start and up to $ 14.95 per month (although there’s an expensive in-game item which can be used to offset this fee). But perhaps the biggest contrast is the level of commitment required. Instead of managing a whole spacecraft and needing to keep track of where it’s docked, DUST 514 players can just jump into instant battles, and are rewarded with experience and in-game currency each time.

Since the two games were linked together just a few weeks ago, however, EVE Online politics are beginning to affect DUST 514, and groups of players are getting drawn into its conflicts — or being sent by EVE in-game alliances to fight for them.

A work in progress

DUST 514 still bears the “beta” tag, and the end-user license agreement reminds players of this, even pointing out that CCP Games may choose to reset players’ gear and experience points at some time in the future. It has a very limited number of planet environments and only two styles of play, which basically amount to capture the flag and team deathmatch. CCP continues to develop DUST, however, promising that even more content will be available in the future.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

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Shakespeare, his work, come to life in PBS series

LOS ANGELES (AP) — Jeremy Irons has a suggestion for "Downton Abbey" fans: Give William Shakespeare a try, too.

Irons is among the prominent hosts of "Shakespeare Uncovered," an inventive series tracing the origins of eight of the writer's plays through a combination of history, new analysis, selected scenes — and, for Irons, a gallop on horseback across a fabled battlefield.

The series begins 9 p.m.-11 p.m. EST Friday (check local listings) on PBS, which happens to be the home of the hit period soap opera, "Downton Abbey."

"Shakespeare Uncovered," along with PBS' planned fall airing of new films of four of Shakespeare's plays, "open up to this huge American audience this gold dust," Irons told reporters recently, and demonstrates that TV "doesn't end with 'Downton Abbey.'"

After then mischievously comparing Shakespeare to an Aston Martin and "Downton" to a Ford Fiesta, Irons admitted he hadn't seen the serial and was just having a bit of fun. But he's serious about the Bard of Avon.

"Watch these Shakespeare productions and you'll see what real writing, what real stories, what real characters are about," he said.

The programs also present actor-writer-producer Shakespeare as a 16th-century impresario who knew how to please audiences and exploit his own work by bringing back popular characters and crafting "prequels."

"Shakespeare Uncovered" opens with Ethan Hawke's exploration of "Macbeth," including visits to the play's Scottish sites, a look at recent productions starring Patrick Stewart and Antony Sher, and an illumination of Shakespeare's grasp of the criminal mind.

It's paired with "Shakespeare Uncovered: The Comedies With Joely Richardson," about "Twelfth Night" and "As You Like It."

"Richard II" with Derek Jacobi and "Henry IV" and "Henry V" with Irons air on Feb. 1, with David Tennant's look at "Hamlet" and "The Tempest" with host Trevor Nunn concluding the series on Feb. 8.

There's travel as well as scholarship for the hosts. Irons visits the battlefield at Agincourt in northern France where, in productions of "Henry V," actors get to tear into the famed St. Crispin's Day speech ("We few, we happy few, we band of brothers").

Irons, who will star this fall in PBS' "Great Performances" adaptation of "Henry IV," said he was shooting the film when he was approached by "Shakespeare Uncovered" producer Richard Denton about taking part.

"Oh, that may be interesting if we can find the time. What do you want to do?" Irons recalled asking Denton. "And he said, 'Well, I want to put you in a boat. I want to put you on a horse. I want to take you to Agincourt.'"

"This sounds very interesting," the 64-year-old actor replied, which opened the door to an unexpected education — and more opportunity for Irons' colorful and unbridled wit.

"I learned, for instance, that the reason we won the Battle of Agincourt is because we had these amazing Welsh archers," while the French, in his words, "wore amazing stuff and great armor and (had) lovely horses, and they pranced around being gorgeous."

Irons' lively approach to the subject matter dovetails with the goal of "Shakespeare Uncovered" as described by producer Denton.

"The real drive (was) to make a series of films that would be entertaining, that would show Shakespeare with the kind of enthusiasm that Jeremy brings to it," Denton said, and would be accessible to those unschooled in the playwright's work.

To please Shakespeare buffs, the programs also include fresh insights into the connection between his life and his art, he said.

The bottom line on the Bard, according to Irons: Shakespeare endures as the greatest dramatist of all because he chronicled the eternal human condition in all its joys and sorrows.

"When we see those plays now, they still speak to us with a resonance that many hundreds of plays written between Shakespeare's time and today don't," he said.

___

Online:

http://www.pbs.org

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SciTimes Update: Science News From Around the Web

Matthew Born for The New York Times

An estimated 15,000 crocodiles, like this one, have escaped from a farm in Limpopo, South Africa.

Friday in science, crocodiles on the loose, coffee fraud, a sleepy squirrel wakes up and melting glaciers. Check out these headlines from around the Web.

Crocodiles on the Loose: An estimated 15,000 crocodiles have escaped from a farm in Limpopo, South Africa, reports The Guardian. Heavy flooding forced the farmers to open their gates to keep the walls from crumbling, sweeping the crocs away down the Limpopo River. Experts say it is not easy to catch a crocodile. The best method: sneak up and grab it.

Fertility Rates Drop in Afghanistan: A drop in birth rates in Afghanistan suggests that education and health planning programs for women are making a difference, reports USA Today. The average number of children Afghan women can expect to have in their lifetime fell to 5.1 at the end of the decade from 8 in the 1990s and 6.3 in the mid-2000s , a USA Today analysis of birth data found.

Fred R. Conrad/The New York Times

Does your dog truly love you?

Animal Passion: Animals have rich emotional lives, reports Psychology Today. The magazine has republished a 2006 report about an Ohio researcher who has studied animal sadness, fear, rage, attachment and a love of play time.

New Stomach Virus: A new strain of norovirus, the cause of a dreaded intestinal illness, is circulating in the United States, The Washington Post reports. The strain, designated “GII.4 Sydney,” appeared in Australia last March. Norovirus causes vomiting and diarrhea and is responsible for 21 million cases of illness a year in this country. Hand-washing and general cleanliness are the best precautions.

We Like How We Smell: Our brains can detect our own scent and distinguish it from the smells of others, reports Discover.com. Scientists have long known that people are drawn to mates with a different smell than their own, but new research marks the first time that scientists have shown that people recognize and like their own smells.

Smokers in Jail: A proposed bill in Oregon would make nicotine a controlled substance and would make cigarette possession illegal, punishable by a year in prison or a $6,250 fine, reports LiveScience.com. Critics say the bill is overly idealistic and would be extremely difficult to implement.

Squirrels on Video: New Scientist offers a video of hibernating Arctic squirrels waking up.

Dolphins Help Dying Friend: For the first time, dolphins have been spotted teaming up to try to rescue an injured group member, reports New Scientist. You can watch the sad video here.

Yogurt Linked to Better Eating Habits: Yogurt eaters report consuming higher amounts of other good-for-you foods, like fruits, vegetables, nuts, fish and whole grains, than do people who don’t eat yogurt, reports eScience News. The study was partially funded by a yogurt maker.

Tony Cenicola/The New York Times

Food Fraud on the Rise: Food fraud – which occurs when food products are mislabeled, diluted or adulterated – is on the rise, reports CNN. The most commonly fraudulent products are olive oil, milk, saffron, honey and coffee. Fillers can be added to spices. Olive oils diluted with cheaper vegetable oil. Pomegranate juice may really be made with grape and pear juices.

An Rx for X and Z: Pharmaceutical companies eager to grab the attention of doctors and patients are returning to drug names starting with X and Z, reports Reuters via The Chicago Tribune. New names for cancer treatments include Xtandi, Xalkori, Xgeva, Zaltrap, Zelboraf and Zytiga.

People Enjoy Safe Sex: A study funded by a condom maker has found that people really like sex, with or without a condom, reports The Atlantic.

Graeme Robinson for The New York Times

Dung Beetles Are Celestial Navigators: Researchers fitted dung beetles with tiny blinders for experiments showing that the feces-eating insects rely on the stars to navigate, reports Scientific American.

Melting Glaciers: Climate change has shrunk Andean glaciers between 30 and 50 percent since the 1970s and could melt many of them away altogether in coming years, reports The Independent. Andean glaciers are a vital source of fresh water for tens of millions of South Americans.

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Stocks gain, boosted by P&G, Starbucks earnings

Stocks rose on Wall Street in midday trading Friday after Procter & Gamble and Starbucks posted strong earnings reports.

The Dow Jones industrial average rose 30 points to 13,855 as of noon Friday. The Standard & Poor's 500 advanced three points to 1,498. The Nasdaq gained eight points to 3,138.

Procter & Gamble, world's largest consumer products maker, gained $2.61 to $73.02 after reporting that its quarterly income more than doubled. P&G also raised its profit forecast for its full fiscal year. Starbucks rose $1.95 to $56.54 after reporting a 13 percent increase in profits.

The S&P 500 broke through 1,500 Thursday for the first time since December 2007, following a drop in claims for unemployment benefits that added to evidence that the labor market is healing. The index fell back but still ended the day fractionally higher and extended its streak of gains to seven days, the longest since October 2006.

“Earnings are growing,” said Joe Tanious, a global market strategist at JPMorgan. “The bottom line is that corporate America is doing exceptionally well.”

Tanious expects corporate earnings to grow at about 5 percent over the “next year or two,” and stock valuations to rise. Currently, the S&P 500 is trading at an average price-to-earnings ratio of 14, below an average of 15.1 for the last decade, according to FactSet data.

Stocks have surged this month, with the S&P 500 advancing 5 percent this month. It jumped at the start of the year when lawmakers reached a last-minute deal to avoid the “fiscal cliff.” Stocks built on those gains on optimism that the housing market is recovering and the labor market is healing. The Dow Jones is up 5.7 percent on the year.

Deutsche Bank analysts raised their year-end target for the index to 1,600 from 1,575.

Companies will be able to maintain their earnings even if lawmakers in Washington decide to implement wide-ranging spending cuts to narrow the budget deficit, the analysts said in a note sent to clients late Thursday.

The yield on the 10-year Treasury note, which moves inversely to its price, climbed 5 basis points to 1.91 percent.

Among other stocks making big moves.

— Netflix climbed $19.61 to $166.47, after the stock logged its biggest single day advance Thursday on the outlook for the company's Internet video service.

— Halliburton gained $1.87 to $39.69 after posting a loss that was smaller than analysts had expected. The oilfield services company said fourth-quarter profits declined 26 percent to $669 million on increasing pricing pressure in the North American market and one-time charges from the Deepwater Horizon disaster. Wall Street had expected worse.

—Hasbro fell $1.45 to $37 after the toy maker said its fourth-quarter revenue failed to meet expectations because of poor demand over the holidays. The company plans to cut about 10 percent of its workforce and consolidate facilities to cut expenses.

— Green Mountain Coffee Roasters rose $1.10 to $44.88 after an analyst noted that sales of a competing coffee brewer introduced by Starbucks were getting off to a weak start.

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'California did the impossible,' Brown says in State of the State

SACRAMENTO -- In a strident and sweeping State of the State address, Gov. Jerry Brown declared Thursday morning that "California did the impossible," bouncing back from the precipice of fiscal collapse to emerge as an economic leader.

With references to the Bible, the history of the California republic and Irish poet William Butler Yeats, Brown mapped out a vision for the state that includes big investment in its water and rail systems and schools free of regulations that he says inhibit flexibility and creativity.

Brown also called a special session of the Legislature for implementation of President Obama's healthcare law, "to deal with those issues that must be decided quickly if California is to get the Affordable Care Act started by next January."

But he stressed that his top priority is keeping the state from falling back into financial chaos.

"We have promises to keep," Brown said, alluding to his successful campaign last fall to persuade voters to raise taxes by billions of dollars. "And the most important one we made to the people if Proposition 30 passed: that we would guard jealously the money…. Fiscal discipline is not the enemy of our good intentions but the basis for realizing them."

He praised lawmakers for helping the state dig out of its fiscal morass but also called on them to show restraint. "What we need to do for our future will require more than producing hundreds of new laws each year," Brown said.

He warned of the dangers of "constantly expanding the coercive power of government by adding each year so many minute prescriptions to our already detailed and turgid legal system."

The governor cited schools as an area where the deluge of laws has undermined good policy. Returning to one of his favorite themes, he urged lawmakers to consider the "principle of subsidiarity … the idea that a central authority should only perform those tasks which cannot be performed at a more immediate or local level."

Brown repeated the call he made earlier this month to free local districts from dozens of state mandates for school spending and to shift more state money to districts with poorer students and non-native English speakers.

He said the steady tuition hikes at the state's institutions of higher education need to stop.

"I will not let the students become the default financiers of our colleges and universities," Brown said, to standing applause in the packed Assembly chamber that held the entire Legislature.

In calling a special session on healthcare, Brown said the state will next year begin providing insurance to nearly 1 million Californians under the federal law and in the coming years will steadily reduce the number of uninsured.

But he warned of attendant risks: "The ultimate costs of expanding our healthcare system under the Affordable Care Act are unknown."

The governor also used his address to tout his ambitious plans for refurbishing the state's water systems. He acknowledged that it will be costly. But inaction, he said, would likely prove more expensive, leaving California exposed to an economic disaster on the scale of that wrought elsewhere by Hurricanes Katrina and Sandy.

The governor also made a plug for his other costly infrastructure initiative, high-speed rail. He said the United States is lagging far behind other countries in this sector, saying that even Morocco is building a high-speed train system.

He called the state's bullet-train plan, which would eventually link San Francisco and Los Angeles, bold, like "everything about California."

The governor also announced will lead a trade mission to China to strengthen California's economic ties with that country and officially open the state's new trade and investment office in Shanghai.

evan.halper@latimes.com

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TSX near 18-month high, buoyed by Agrium, RIM

TORONTO (Reuters) – Canada’s main stock index hit a near 18-month high on Thursday, as shares of Agrium Inc rose after the fertilizer maker raised its profit forecast and as U.S. manufacturing and labor data drove optimism on the economic outlook of Canada’s largest trade partner.

Shares of Research In Motion Ltd also boosted the market, rising more than 3 percent after a report that China’s Lenovo Group said a bid for the BlackBerry maker was among the options available to boost its mobile business.

Canadian stocks were also supported by data that showed Chinese manufacturing growth hit a two-year high this month. Gains were kept in check by falling gold stocks, which slipped with the price of the precious metal.

In the United States, a private survey showed that factory activity advanced at the fastest pace in nearly two years this month, while the government reported the number of Americans filing new claims for jobless benefits hit a five-year low last week.

“There’s a growing feeling that we’re heading in the right direction. The U.S. economy is showing a little bit of life, and that’s spilling over into Canada,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.

The Toronto Stock Exchange‘s S&P/TSX composite index <.gsptse> was up 41.36 points, or 0.32 percent, at 12,835.41, after touching 12,863.47, its highest since August 2, 2011.</.gsptse>

Seven of the 10 main sectors on the index were trading higher.

The materials sector, which includes mining stocks, slipped 0.1 percent as declines in gold stocks offset a rise in shares of fertilizer giants Agrium and Potash Corp .

Agrium rose 3.5 percent to C$ 114.55 after it raised its fourth-quarter earnings forecast as strong grain and oilseed prices spurred demand for its fertilizer products over the fall season.

Ketchen, noting the activity in Agrium shares over the past few days, said, “People are taking another look at it, thinking maybe it’s time to get back in.”

Potash was up 2.1 percent at C$ 42.77.

The energy sector gained 0.6 percent and was the biggest contributor to the market’s gains as U.S. crude oil prices rose.

Canadian Natural Resources Ltd rose 1.5 percent to C$ 30.62.

Financials, the index’s weightiest sector, added 0.4 percent. Toronto Dominion Bank

was up 0.4 percent at C$ 83.51, and the Royal Bank of Canada rose 0.3 percent to C$ 61.62.

(Editing by Jeffrey Hodgson and Leslie Adler)

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White, Underwood, Lumineers to perform at Grammys

NEW YORK (AP) — Grammy nominees Jack White, Carrie Underwood and the Lumineers will hit the Grammys stage next month.

The Recording Academy announced Thursday that those acts will join previously announced performers including fun., The Black Keys and Taylor Swift at the Feb. 10 awards show in Los Angeles.

White is nominated for album of the year and the Lumineers are up for best new artist.

U.K. newcomer Ed Sheeran and Elton John will perform together. Sheeran's "The A Team" is nominated for song of the year.

Country singers Miranda Lambert and Dierks Bentley will also join forces onstage.

The Black Keys, Rihanna and Mumford & Sons are also set to perform.

Frank Ocean, Jay-Z, fun., Kanye West, Black Keys' Dan Auerbach and Mumford & Sons lead with six nominations each.

____

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http://www.grammys.com

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Well: Ask Well: Long-Term Use of Nicotine Gum

In small doses, like those contained in the gum, nicotine is generally considered safe. But it does have stimulant properties that can raise blood pressure, increase heart rate and constrict blood vessels. One large report from 2010 found that compared to people given a placebo, those who used nicotine replacement therapies had a higher risk of heart palpitations and chest pains.

That’s one reason that nicotine gum should, ideally, be used for no more than four to six months, said Lauren Indorf, a nurse practitioner with the Cleveland Clinic’s Tobacco Treatment Center. Yet up to 10 percent of people use it for longer periods, in some cases for a decade or more she said.

Some research has raised speculation that long-term use of nicotine might also raise the risk of cancer, though it has mostly involved laboratory and animal research, and there have not been any long-term randomized studies specifically addressing this question in people. One recent report that reviewed the evidence on nicotine replacement therapy and cancer concluded that, “the risk, if any, seems small compared with continued smoking.”

Ultimately, the biggest problem with using nicotine gum for long periods is that the longer you stay on it, the longer you remain dependent on nicotine, and thus the greater your odds of a smoking relapse, said Ms. Indorf. “What if the gum is not available one day?” she said. “Your body is still relying on nicotine.”

If you find yourself using it for longer than six months, it may be time to consider switching to sugar-free gum or even another replacement therapy, like the patch or nasal spray.

“Getting people on a different regimen helps them break the gum habit and can help taper them off nicotine,” Ms. Indorf said.

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Apple shares tumble after relatively unimpressive earnings report

Apple Inc. may still make products customers love, but its latest earnings report appears to have broken investors' hearts.

For the third quarter in a row, Apple reported revenue and profit that were impressive by normal standards, but short of what analysts had expected. Investors reacted harshly, driving Apple's stock price down more than 10% in after-hours trading Wednesday.

If that trend holds when trading opens Thursday, Apple will have lost almost $50 billion in market value in the blink of an eye, and its stock will have given up almost all the extraordinary gains it had made in the last year. Investors' and fund managers' belief in one of the world's most widely held stocks will be severely tested in the coming days.

More fundamentally, despite upbeat talk by Apple Chief Executive Tim Cook, the performance is unlikely to quell growing worries that Apple's remarkable run of dominance might be over.

"Overall, compared to other companies, it's impressive. But for Apple's standards, it's not great," said Patrick Moorhead of Moor Insights & Strategy. "I do think this somewhat fuels the perception that Apple is slowing down a bit.... And it's driven by the fact that some of its competitors are catching up, and in some markets have already caught up."

Apple executives did their best during an hourlong conference call with analysts to project optimism and excitement about both the last quarter and the months ahead. They noted that the company had trouble meeting demand for both iPads and Macs, and could have sold many more had they been able to build enough.

They also pointed to a growing business in China and the expansion of iTunes, which is now available in 119 countries.

"Apple is in one of the most prolific periods of innovation in its history," Cook said. "We continue to believe our fundamentals, our remarkable people, our clear and focused strategy will serve us well in the coming months and years ahead."

Cook praised the record numbers posted by Apple. For the three months that ended in December, Apple said revenue increased 18% to a record $54.5 billion. Profit also set an all-time high but was up only slightly from the year-earlier quarter, rising to $13.08 billion, or $13.81 a share, from $13.06 billion, or $13.87.

Apple said it sold a record 47.8 million iPhones last quarter, up from 37 million iPhones in the same quarter of 2011. Despite that massive figure, some analysts had hoped to see stronger demand with sales exceeding 50 million.

"Meeting expectations is not enough for Apple," said Colin Gillis of BGC Financial. "So that's a little bit of a disappointment…. International sales were a little weaker than people expected. So we'll see how that shakes out."

Last quarter saw the introduction of the iPad mini, a 7.9-inch version of Apple's popular tablet computer. The Cupertino, Calif., company said it sold a total of 22.9 million iPads in the quarter, also a record, up from 15.4 million a year earlier. The company didn't break out iPad mini numbers from its total tablet sales, but Chief Financial Officer Peter Oppenheimer told analysts that the smaller version has been a hit and that the company experienced significant backlog getting the product to store shelves. The 22% lower average selling price for Apple's tablets suggests the mini has performed well but probably cannibalized some sales of its 9.7-inch version.

Historic comparisons were challenging this year because the most recent quarter had only 13 weeks, compared with 14 weeks for the same quarter of 2011.

Like many retailers and consumer electronics companies, the quarter from October to December is typically Apple's largest because of the holiday shopping season. Last year, Apple managed to stun investors by beating its own revenue estimates by more than 25% and earnings forecast by nearly 50%. That sent the stock soaring.

But even as Apple extended its lead as the world's most valuable company, and set a record in August for most valuable company ever when not adjusted for inflation, doubts began to creep into the minds of analysts and investors.

Shares have plummeted 27% in the last four months. On Wednesday, shares rose $9.24, or 1.8%, to $514.01 during regular trading.

Apple reported strong earnings in both the third and fourth quarters last year, but the numbers missed analysts' consensus estimates. Gradually, analysts began lowering their forecasts for Apple's earnings for the current fiscal year. At the same time,

Apple experienced some uncharacteristic gaffes. The new Apple Maps app that replaced Google Maps on iOS 6 devices had reliability problems, prompting a rare apology by Apple. And the iPhone 5 that went on sale in September faced long shipping delays as Apple suppliers struggled to adapt to the new, longer screen size.

The dismissal of iOS chief Scott Forstall, a favorite of the late Apple co-founder Steve Jobs, raised eyebrows. But so did a new strategy for launching products: Whereas Apple updates to products used to be few and far between, the company has lately begun increasing the number of products as well as the introduction of new versions.

The first quarter saw one of the busiest product launch cycles in the company's history. The quarter was the first full quarter of sales for the iPhone 5, a new iPod Touch and nano, the fourth iPad, a new 13-inch Retina MacBook Pro, and, of course, the first iPad mini.

Observers have pointed to this accelerated pace as an indication that Apple is facing more competitive pressure from rivals such as Samsung Electronics Co., which is now the world's biggest seller of smartphones, with its Galaxy series of phones. The concern is that the faster upgrade cycle plus the smaller iPad mini will cut into Apple's historically high profit margins.

Such fears over lower profits have also been stoked by the debate over whether Apple plans to release a cheaper iPhone aimed at capturing market share in emerging economies and the concern that Apple has not been able to strike a deal with China's largest carrier.

Now that the first-quarter numbers have been released, analysts will be busy recalibrating their projections over the next couple of days. But the focus is also likely to shift to renewed speculation about new products that investors are hoping will drive another big run for the stock.

chris.obrien@latimes.com

andrea.chang@latimes.com

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