But the Moore that got struck on Monday is not the same as
in 1999. Like a lot of towns across America and in the so-called
“Tornado Alley,” rapid growth has made it a bigger target,
vulnerable to more damage.

The tornado, with winds that may have topped 200 miles (322
km) per hour, killed at least 24 people and injured hundreds
more, with many of the casualties children from two schools that
were destroyed.

Local media said the storm was much more destructive than
the tornado that laid waste to Moore in May 1999. At the time,
that storm was the most destructive in history by insured loss
($1 billion), later eclipsed by two 2011 tornadoes in Joplin,
Missouri and Tuscaloosa, Alabama.

Between 2000 and 2011, Moore’s population grew by about 34
percent to 56,300, according to U.S. Census Bureau data. Over
the same time, Oklahoma’s population grew 9 percent and the U.S.
population grew almost 10 percent.

“Every so often, (a tornado) will hit a city. Sometimes you
may get clusters where there are several of those hitting in a
given year. Other times you will go years and years without that
happening,” said Bob Henson of the National Center for
Atmospheric Research.

“The U.S. population is growing and more territory is
covered by homes and businesses than used to be the case. So the
targets are getting larger.”

Insurance industry experts call the phenomenon “disaster
amnesia.” People forget how badly devastated a region has been
and focus only on what it can become through rebuilding.

One of the best examples is the Miami-area community of
Homestead, all but obliterated by Hurricane Andrew in 1992 but
since rebuilt and now doubled in population.

‘SMACK IN THE HEART’

In fact, this was at least the third severe tornado to
strike Moore over the last 15 years – a fact scientists called
interesting but not indicative of the town being any more
susceptible than any place else.

“Oklahoma City is smack in the heart of the most prone area
where these conditions come together in the most dangerous way
at (this) time of year,” said Tim Doggett, senior principal
scientist at disaster modeling company AIR Worldwide. “When
things happen with some sort of random aspect to them, people
look for patterns.”

After a record number of twisters in 2011, volume has
actually dipped of late. Last year was the first time in at
least 20 years that fewer than 1,000 tornadoes touched down in
the United States.

“Until the breakout this week, it’s been a very quiet year
for tornadoes in the United States,” said Anthony Del Genio, a
climatologist at NASA’s Goddard Institute for Space Studies.

While it can be tempting to wonder whether severe events
like this week’s tornadoes are part of a bigger pattern, he
said, “it’s always good to remember that we went through a very
quiet period leading up to this.”

LOSSES STILL UNCLEAR

The German reinsurer Munich Re has estimated
tornadoes caused about $40 billion in insured losses in the
United States in 2011 and 2012. Since 1980, average thunderstorm
losses (including tornadoes) have risen sevenfold.

Though the scope of the damage seems obvious, it will be
days before there is any sense of just how much the Moore storm
has cost the insurance industry.

One problem is a lack of precision. As good as the science
may have become, it remains hard to predict where and when a
tornado is likely to hit in future, making it hard for insurers
to fully model their exposure.

I really think (insurers) would like to know a much more
precise location level … and even in tens of thousands of
simulated storm years that’s a difficult question to answer,”
AIR’s Doggett said.

Catastrophe bond investors, who have about $1 billion in
exposure to U.S. tornado risk, were especially on edge Tuesday.
One such bond was wiped out by 2011′s record tornado season,
putting a chill in that market.

USAA, the insurer that caters to military veterans and their
families, said it had been unable to get its team of 120
adjusters into Moore. A spokesman said the company already had
more than 350 claims, ranging from hail damage to total loss.

State Farm, the largest home and auto insurer in Oklahoma,
said Tuesday it did not yet have claims numbers compiled, as its
adjusters have not been able to get close to Moore either. A
spokesman told Reuters it had already started receiving calls,
though – including from one customer whose only remaining
possession in the rubble of their home was a copy of their
insurance policy.

(Reuters) – Shares in Barnes & Noble Inc rose 18 percent on Thursday after a report that Microsoft Corp is considering an offer to acquire the tablet and e-book business of B&N’s Nook Media unit.

The technology website TechCrunch reported that Microsoft, which already owns a 17 percent stake in Nook Media, was proposing a $1 billion offer to buy all of Nook’s digital assets. A source familiar with the document cited by TechCrunch confirmed its authenticity.

The report also suggested that Nook would stop selling Android-based tablets entirely by the end of fiscal 2014 in favor of distributing content via other publishers’ platforms.

It was not clear from the TechCrunch story whether Microsoft had formally made an offer to the B&N board or whether B&N had replied.

The New York Times reported that the documents TechCrunch cited were several weeks old and that any deal – if one is even pending – was not imminent.

B&N and Microsoft both declined to comment.

Microsoft acquired its stake in the Nook Media unit a little more than a year ago in a deal that valued the entire business at $1.7 billion. In December the British publisher Pearson Plc bought a stake in the unit at a $1.8 billion valuation.

But Nook Media sales have disappointed since. Revenue dropped 26 percent in the most recent holiday quarter as Nook sold fewer digital readers and tablets and had to cut prices. Just this week B&N slashed the price of its best tablet by one-third as a special promotion for Mother’s Day.

Barclays analyst Alan Rifkin, in a note to clients on Thursday, said a lower valuation for the Nook Media unit was appropriate and that $1 billion was even higher than he had modeled.

B&N shares rose 18 percent to $21.02 in midday trading. The stock last traded at those levels a year ago, around the time of the Microsoft investment.

The stock is heavily shorted, with almost 36 percent of its float sold short as of April 15. Short sellers borrow stocks and sell them, betting the price will fall. Where short interest is high, that can exacerbate a rally, as people rush in to cover their positions.

Credit Suisse, in a note to clients, said the suggested terms of the Microsoft offer implied that Barnes & Noble was worth about $27 per share.

COLLEGE UP IN THE AIR

Nook Media also includes a college bookstore chain, but the TechCrunch report suggested the Microsoft offer would include only the e-book, digital reader and tablet assets.

If Microsoft carves the college bookstore chain out of the Nook Media unit, and B&N takes back those stores, Credit Suisse said the valuation of B&N could rise even higher.

While the college bookstore chain has provided B&N with much needed cash, sales have been weak. In the first three quarters of the fiscal year, sales fell 0.3 percent, while operating profit fell 7 percent to $115.8 million.

The college textbook business is undergoing a transformation with the shift to digital, as publishers move away from large, heavy books that last for years to multiple packages with smaller bites of content.

Companies like News Corp and Apple have started to make plays on the digital textbook market as that shift accelerates.

COULD SPEED OTHER SALES

Earlier this year, B&N Chairman Leonard Riggio said he wanted to buy the company’s chain of nearly 700 namesake bookstores. Selling off Nook could simplify that process, especially if it reunited Riggio with the college bookstore business, which he sold to B&N in 2009.

B&N first indicated it might spin off the Nook business in early 2012. The retailer has spent hundreds of millions of dollars on the unprofitable unit, trying to make its devices competitive against devices from Amazon, Apple and Google, among others.

The latest IDC market share data for tablets, released earlier this month, leaves B&N out of the industry’s top five vendors, suggesting it has less than 2 percent of the global market.

B&N has typically launched a new edition of the Nook every year. But this year it simply updated its high-definition tablets by adding Google’s app store, which a number of analysts saw as an easy way for the company to launch a “new” Nook.

One uncertainty in any Microsoft bid is how Liberty Media would respond. It holds preferred shares in B&N that, if converted, would represent 17 percent of the company. Liberty was not immediately available to comment.

One analyst following Barnes & Noble said a Microsoft deal, if it happens, would be dramatic but not necessarily surprising.

“We must be careful here because details are lacking, but with devices phasing out, we see sale of the digital assets as an effective sale of the entire Nook business, unless co-ownership or leasing of digital content is arranged,” Stifel analyst David Schick said in a research note.

(Reporting by Phil Wahba and Ben Berkowitz; Additional reporting by Liana B. Baker; Editing by Alden Bentley, Theodore d’Afflisio and John Wallace)

(Reuters) – Sprint Nextel Corp on Monday said its merger partner, SoftBank Corp, has waived some terms of their agreement so that Sprint can seek more information from rival suitor Dish Network Corp.

The exchange of information between Sprint and Dish indicates the companies are in conversations about the satellite broadcaster’s $25.5 billion takeover bid, even if Sprint for now is standing by its $20.1 billion pact with SoftBank.

Dish said it had received a Sprint request for more information about the bid, and a non-disclosure agreement that would keep such information private.

Dish said it had already given some information to Sprint in response to requests from a Sprint special committee.

SoftBank said the waiver it granted does not allow Sprint to disclose nonpublic information or negotiate with Dish.

But Dish said it looks “forward to being able to conduct confirmatory due diligence as soon as possible” with Sprint.

Dish shocked markets two weeks ago with its cash and stock offer for Sprint, which it claimed was superior to the deal SoftBank and Sprint struck last October. Sprint said it had formed a special board committee and hired advisers to consider the Dish bid. But it also said it was still on track to close its deal with SoftBank by July 1.

SoftBank, in a statement, said it had issued the waiver at the request of Sprint’s special committee and reiterated its intent to proceed with the deal.

“SoftBank remains highly confident that its fully executed merger agreement with Sprint, under which it has already provided Sprint with $3.1 billion of capital, provides the shareholders of Sprint significantly more value than the highly leveraged approach made by Dish on April 15th,” it said.

Dish Chairman Charlie Ergen said in a statement that Dish was “confident that the Sprint Board will share our view that this proposal is superior by offering Sprint shareholders greater value with a higher price and more cash.”

Dish shares were up 0.8 percent at $40.32 in afternoon trading, while Sprint shares were off 1 cent at $7.11.

(Reporting By Liana B. Baker and Ben Berkowitz; Editing by Maureen Bavdek, Sofina Mirza-Reid and John Wallace)

With results in from 271 of the S&P 500 companies, year-over-year earnings growth is projected at 3.9 percent, compared with a forecast for 1.5 percent growth at the start of the earnings season, Thomson Reuters data shows. That figure includes those that have reported and analyst estimates for those who have not.

The companies yet to report are expected to post an aggregate earnings decline of 0.4 percent, according to Thomson Reuters data – whereas the companies that have already reported have posted growth of 6.1 percent.

Among the biggest companies yet to report are Dow components Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) and Home Depot (HD.N: Quote, Profile, Research, Stock Buzz).

Some 69 percent of the S&P 500 have beaten forecasts, once again conforming to the pattern of lowering expectations enough to “surprise” by beating them. The 69 percent figure exceeds the long-term average of 63 percent. This has been the pattern for the last 15 quarters, with growth estimates at the beginning of earnings ultimately being beaten by at least a full percentage point.

From April 1 to April 24, S&P 500 earnings growth expectations fell 170 basis points for the second quarter, 130 basis points for the third quarter and 70 basis points for the fourth quarter.

“If this recent pattern holds, you’re going to find that those beats will continue and therefore lead earnings season to be one of continued positive surprise,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

So far, this has been good enough for investors. Since earnings season began with Alcoa’s report on April 8, the S&P 500 has gained 1.2 percent, and it closed Friday less than 1 percent from its all-time high of 1,593.37 reached on April 11. So far this year, it has climbed nearly 11 percent.

GOING FORWARD, WITH CAUTION

Even though profits have been better than expectations, revenue forecasts have declined, a sign, once again, that companies are exceeding results on the bottom line because of reduced expenses, and not because of stellar sales. So far, just 42 percent of companies are beating revenue expectations, below the long-term average.

First-quarter revenue now is expected to fall 0.3 percent, which is worse than the forecast for 1 percent growth when the season started.

That means companies – yet again – have been able to squeeze out higher profits through cost-cutting and other measures. But that does not bode well for hiring and stands as a potential headwind to the economy in coming quarters.

“It does concern me. It’s not sustainable over the medium or the long term. There’s only so much companies can do to sustain growth without increasing sales,” said Paul Zemsky, head of asset allocation at ING Investment Management, in New York.

There are plenty of examples of major companies that were deeply reserved about the second quarter or the remainder of the year.

Among those were Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) and Amazon.com Inc (AMZN.O: Quote, Profile, Research, Stock Buzz). Apple, until recently the world’s biggest company by market value, saw its first quarterly profit decline in a decade and issued a soft outlook for the second quarter that fell short of investor hopes. The stock has lost about 40 percent of its value since September.

“The market was telling you the numbers were too high,” BGC analyst Colin Gillis said of Apple’s outlook, adding that it was “pretty much even worse than even I was expecting.”

(Additional reporting by Rodrigo Campos and Chuck Mikolajczak; Editing by Marguerita Choy)

With results in from 271 of the S&P 500 companies,
year-over-year earnings growth is projected at 3.9 percent,
compared with a forecast for 1.5 percent growth at the start of
the earnings season, Thomson Reuters data shows. That figure
includes those that have reported and analyst estimates for
those who have not.

The companies yet to report are expected to post an
aggregate earnings decline of 0.4 percent, according to Thomson
Reuters data – whereas the companies that have already reported
have posted growth of 6.1 percent.

Among the biggest companies yet to report are Dow components
Wal-Mart Stores Inc and Home Depot.

Some 69 percent of the S&P 500 have beaten forecasts, once
again conforming to the pattern of lowering expectations enough
to “surprise” by beating them. The 69 percent figure exceeds the
long-term average of 63 percent. This has been the pattern for
the last 15 quarters, with growth estimates at the beginning of
earnings ultimately being beaten by at least a full percentage
point.

From April 1 to April 24, S&P 500 earnings growth
expectations fell 170 basis points for the second quarter, 130
basis points for the third quarter and 70 basis points for the
fourth quarter.

“If this recent pattern holds, you’re going to find that
those beats will continue and therefore lead earnings season to
be one of continued positive surprise,” said Mark Luschini,
chief investment strategist at Janney Montgomery Scott in
Philadelphia.

So far, this has been good enough for investors. Since
earnings season began with Alcoa’s report on April 8, the S&P
500 has gained 1.2 percent, and it closed Friday less than 1
percent from its all-time high of 1,593.37 reached on April 11.
So far this year, it has climbed nearly 11 percent.

GOING FORWARD, WITH CAUTION

Even though profits have been better than expectations,
revenue forecasts have declined, a sign, once again, that
companies are exceeding results on the bottom line because of
reduced expenses, and not because of stellar sales. So far, just
42 percent of companies are beating revenue expectations, below
the long-term average.

First-quarter revenue now is expected to fall 0.3 percent,
which is worse than the forecast for 1 percent growth when the
season started.

That means companies – yet again – have been able to squeeze
out higher profits through cost-cutting and other measures. But
that does not bode well for hiring and stands as a potential
headwind to the economy in coming quarters.

“It does concern me. It’s not sustainable over the medium or
the long term. There’s only so much companies can do to sustain
growth without increasing sales,” said Paul Zemsky, head of
asset allocation at ING Investment Management, in New York.

There are plenty of examples of major companies that were
deeply reserved about the second quarter or the remainder of the
year.

Among those were Apple Inc and Amazon.com Inc
. Apple, until recently the world’s biggest company by
market value, saw its first quarterly profit decline in a decade
and issued a soft outlook for the second quarter that fell short
of investor hopes. The stock has lost about 40 percent of its
value since September.

“The market was telling you the numbers were too high,” BGC
analyst Colin Gillis said of Apple’s outlook, adding that it was
“pretty much even worse than even I was expecting.”

The world’s largest Internet retailer on Thursday reported its highest gross profit margins in a decade as years of spending on high-margin businesses, from digital media to cloud services, began to pay off. But slower revenue growth and a disappointing outlook for this quarter exacerbated uncertainty about the its business beyond the United States.

Amazon faces a sluggish European economy and has had inconsistent success breaking into emerging markets such as China, where competition from the likes of Alibaba is intense.

Year-over-year unit growth, which measures the number of items Amazon sells, was 30 percent in the first quarter, down from 49 percent in the first quarter of 2012.

As growth concerns worsen, the company will have trouble justifying its triple-digit price-earnings multiple. Analysts at J.P. Morgan, Credit Suisse and Pacific Crest Securities on Friday lowered their price targets on Amazon shares, citing the top-line deceleration.

“As unit growth decelerates, does Amazon stop being a growth stock and start becoming growth-at-a-reasonable price?” said one analyst, who requested anonymity. “Margins are coming up but they are still pretty low, so there’s not much support for an earnings multiple valuation.”

The analyst did not want to be identified because these concerns are based on a worst-case scenario for Amazon.

“That’s not my base case but that’s the concern,” the analyst added. “The stock could be stuck between $250 and $280.”

FUNDAMENTAL SHIFT

Longer-term, investors are keeping a close eye on a fundamental shift in its business.

The Internet retail giant that once specialized in moving books and other physical items quickly is increasingly trying to do the same in the digital world, where profit margins are higher, partly because e-books, music and video files and are transmitted electronically at high speed.

It has diversified aggressively into other revenue streams like digital content, advertising and the Amazon Web Services cloud computing business. Lately, it has even branched into creating original video content.

Throw in a fast-expanding third-party merchant business, where Amazon books a cut of sales from seller listings on its website, and the long-term margin outlook looks solid.

“Over the long term it does help margins,” said Ben Schachter, an analyst at Macquarie. “You don’t have to put these things on a truck and ship them.”

ROOM TO MOVE

In the first quarter, net shipping costs stood at 4.7 percent of sales, down from 5.1 percent a year earlier.

“What we’re seeing is that Amazon is really getting leverage from shipping costs. AWS is becoming a big part of their mix. They are also benefiting from a greater mix of advertising revenues. We’ll continue to see that improve,” said Victor Anthony, an analyst at Topeka Capital Markets.

But its brick-and-mortar rivals are catching on, in many cases borrowing pages from Amazon’s pioneering e-commerce play-book.

“Amazon’s now growing at about 2x eCommerce, compared to 3x a year ago,” Doug Anmuth, an analyst at J.P. Morgan, wrote in a note to investors following the company’s results.

Retailers are losing less market share to Amazon than they used to as they increase selection online, price-match more aggressively, and work to combat showrooming, Anmuth argued.

Shares of Best Buy Co and HH Gregg Inc, electronic retailers that have been particularly hard hit by Amazon competition, have doubled so far this year.

Amazon shares are up 1.5 percent this year, while Wal-Mart Stores Inc and Target Corp are up about 16 percent and 20 percent, respectively.

Despite declines, Amazon shares still trade at about 100 times 2013 estimated earnings and 75 times 2014 forecast profit.

Even on a more-forgiving valuation method, Amazon shares are expensive. The stock trades at about 20 times earnings, before interest, tax, depreciation and amortization, or EBITDA. Google Inc trades at about 10 times EBITDA and eBay Inc trades at 11 to 12 times EBITDA.

Amazon will need to pump out higher earnings in the future to support such valuations, especially if growth rates continue to slide, analysts said.

The company’s gross profit margin hit a better-than-expected 26.6 percent in the first quarter, up from 24 percent a year earlier.

Still, one major source of recent profit growth, Amazon’s online marketplace for third-party sellers, known as 3P, stalled in early 2013.

First-quarter 3P unit growth was 33 percent, down from a 40 percent growth rate in the first quarter of 2012, according to Ken Sena, an analyst at Evercore Partners.

Amazon’s retail business, known as 1P, buys products at bulk prices and sells them at higher prices, collecting the difference as profit and recording the sale price as revenue.

In a 3P transaction, Amazon books commissions from third-party sales on its marketplace as revenue. That revenue is almost all profit, so as the 3P business has grown, Amazon’s gross profit margins have expanded.

The slowdown in 3P growth during the first quarter “has some concerned that the gross margin leverage story may be nearing its end,” Sena said.

Amazon shares were down 6.3 percent at $257.36 on Friday afternoon on the Nasdaq, off an earlier low at $252.81.

(Writing by Ben Berkowitz; editing by Edwin Chan, Lisa Shumaker and Matthew Lewis)

Analysts at J.P. Morgan, Credit Suisse and Pacific Crest
Securities lowered their price targets on Amazon shares, citing
the top-line deceleration.

Late on Thursday, the company reported slower revenue growth
and offered a disappointing outlook for this quarter,
exacerbating uncertainty about the health of its business beyond
the United States.

If Amazon’s growth rate continues to slide, Wall Street
worries that the company could stop being considered a growth
stock and instead be valued based on future earnings.

While profit margins are improving, Amazon does not generate
enough income yet to support its current valuation, according to
one analyst.

“As unit growth decelerates, does Amazon stop being a growth
stock and start becoming growth-at-a-reasonable price?” said the
analyst, who requested anonymity. “Margins are coming up but
they are still pretty low, so there’s not much support for an
earnings multiple valuation.”

The analyst did not want to be identified because these
concerns are based on a worst-case scenario for Amazon.

“That’s not my base case but that’s the concern,” the
analyst added. “The stock could be stuck between $250 and $280.”

Amazon shares were down 7.6 percent at $253.80 on Friday
afternoon on the Nasdaq.

Despite declines, Amazon shares are still trading at about
100 times 2013 estimated earnings and 75 times 2014 forecast
profit.

Even on a more-forgiving valuation method, Amazon shares are
expensive. The stock trades at about 20 times earnings, before
interest, tax, depreciation and amortization, or EBITDA. Google
Inc trades at about 10 times EBITDA and eBay Inc
trades at 11 to 12 times EBITDA.

Amazon faces a sluggish European economy and inconsistent
efforts to break into emerging markets such as China, where
competition from the likes of Alibaba is intense.

“Amazon’s now growing at about 2x eCommerce, compared to 3x
a year ago,” Doug Anmuth, an analyst at J.P. Morgan, wrote in a
note to investors following the company’s results.

Traditional retailers are losing less market share to Amazon
than they used to as they increase selection online, price-match
more aggressively, and work to combat showrooming, Anmuth
argued.

Amazon shares are up only 1.5 percent so far this year,
while traditional retailers Wal-Mart Stores Inc and
Target Corp are up about 16 percent and 20 percent,
respectively.

Shares of Best Buy Co and HH Gregg Inc,
electronic retailers that have been particularly hard hit by
Amazon competition, have doubled so far this year.

(Writing by Ben Berkowitz; editing by Edwin Chan, Lisa Shumaker
and Matthew Lewis)

The company reported slowing revenue growth and offered a
disappointing outlook for this quarter on Thursday, exacerbating
uncertainty about the health of its business beyond the United
States.

But that may be masking a fundamental shift in its business
on home turf. The Internet retail giant that once specialized in
moving books and other physical items quickly is increasingly
trying to do the same in the digital world, where profit margins
are higher, partly because e-books, music and video files and
are transmitted electronically at high speed.

Throw in a fast-expanding third-party merchant business,
where Amazon simply books a cut of sales from seller listings on
its website, and the retail giant’s margin outlook is looking a
lot better.

“Over the long term it does help margins,” said Ben
Schachter, an analyst at Macquarie. “You don’t have to put these
things on a truck and ship them.”

In the first quarter, net shipping costs stood at 4.7
percent of sales, down from 5.1 percent a year earlier.

Amazon has been doing all the things a retail business will
usually do to goose margins, like putting its distribution
closer to customers and charging partners more to ship goods.

But it has also diversified aggressively into other revenue
streams like digital content, advertising and the Amazon Web
Services cloud computing business.

In its news release Thursday, Amazon listed 14 highlights
for the first quarter – all but one related to its digital
businesses.

Chief Executive Jeff Bezos talked about Amazon’s effort to
make its own TV shows, which will be delivered over the
Internet, rather than in DVD form.

Notably, Amazon’s top-10 selling items in the first quarter
were digital goods or Kindle gadgets, which are tablets or
e-readers used to buy and consume digital content, Chief
Financial Officer Tom Szkutak told analysts during a conference
call.

“That is the first time that we have seen that,” he said.

DIGITAL EXPANSION

In the short term, the Internet retail giant that started
out as a book-retailing business faces several challenges. Its
business faces a sluggish European economy and inconsistent
efforts to break into emerging markets such as China, where
competition from the likes of Alibaba is intense.

Amazon’s shares slid 3 percent to about $267 in Thursday
after-hours trade, after executives pointed out the
macroeconomic challenges.

But longer term, analysts say Amazon’s focus on aggressively
pushing digital content – such as by selling Kindles at close to
cost, undercutting much of the competition – is a winning
strategy.

Amazon has largely focused on using price as a lever to get
its content in front of more customers.

Whether selling Kindle e-book readers and Kindle Fire
tablets cheaply, or bundling on-demand streaming video with
subscriptions to other services, Amazon has bet that it can keep
people once it has their attention.

Lately, it has branched into creating original video
content. Last week the company posted 14 pilot TV shows online,
intending to let reviews decide which ones it turns into full
series.

Amazon has also been gaining on Apple Inc in the
digital music business, tripling its market share over the last
five years – albeit to a level still just a third of Apple’s.

At the same time, the company has also made much of its
cloud computing unit, Amazon Web Services, which provides data
services to a broad range of companies. AWS, as it is commonly
known, generated $1.8 billion in revenue last year and is
expected to grow rapidly.

In the most recent quarter, net sales in Amazon’s “other”
line, which includes AWS in North America as well as advertising
services, rose 59 percent.

“What we’re seeing is that Amazon is really getting leverage
from shipping costs. AWS is becoming a big part of their mix.
They are also benefiting from a greater mix of advertising
revenues. We’ll continue to see that improve,” Topeka Capital’s
Victor Anthony said.

If Wall Street follows Apple’s famous advertising slogan of
old, it may relieve some of the pressure on Apple’s chief
executive, quiet investors’ grumbling about its recent share
price slide, and buy the company time to do what it says it does
best: come up with and market new products.

On Tuesday, Apple said it would return $100 billion to
shareholders by the end of 2015, in part by raising its dividend
15 percent and in part by increasing its share buyback program
six-fold to $60 billion.

To some extent, the expanded capital return program helped
mask its first quarterly profit decline in a decade, though
analysts say the more important issue now is what Apple has in
store on the gadget front.

Cook is trying to reset heightened expectations around a
company once universally feted for its ability to captivate both
consumers and Wall Street. In the years following the
introduction of the iPhone in 2007 and the iPad in 2010, the
company established a pattern of consistently blowing past even
the most bullish Wall Street earnings expectations, much to
everyone’s delight.

But on Tuesday, Cook made the rare admission to analysts on
a conference call that Apple’s growth has slowed and margins
have decreased.

Apple is a mature company that’s now trying to get everyone
to see it as one, analysts say.

“They are modulating into a state where the highs are not as
high and lows are not so low,” Forrester analyst Sarah Rotman
Epps said.

Apple shares moved 5 percent higher Tuesday on the back of
the capital program, though the gains evaporated later.

Any gains would have come as little consolation to investors
who have watched Apple shed more than $280 billion in market
value in the last few months as investors adjusted to a new,
slower-growth reality.

Roger Kay, president of researcher and consultant Endpoint
Technologies Associates said the expanded share repurchase and
dividend scheme would keep investors satisfied for a while.

In the longer term, Apple needs another blockbuster gadget
to accelerate its momentum — and win investors back for the
longer term. Cook tried on Tuesday to drum up enthusiasm around
the product pipeline by teasing that “some really great stuff”
– potentially in new product categories — was coming in the
fall and in 2014.

“They need something that breaks into new verticals, whether
it’s TV or something that’s wearable, that opens up a new
revenue stream,” Epps said.

RESETTING THE SCALE

That remains among the most pertinent concerns for
Apple-watchers. Since Cook took over in 2011 from late
co-founder Steve Jobs, some investors have questioned whether
Apple can continue to up-end technology markets with new
revolutionary products that appeal to consumers in the absence
of the tech icon.

Cook has in the past year presided over three straight
quarters of missed revenue expectations before the
January-to-March period. The key product introduced during his
tenure is the smaller iPad mini, a response to tablets such as
Amazon.com Inc’s Kindle that were making inroads on its
home turf.

The public takes as a given that a new iPhone and new iPads
will come this year, along with refreshed Mac computers and iPod
music players. But the speculation is that Apple is also working
on a watch, a television and a radio service, among other
products in the pipeline.

Cook would not provide any more details on new products, no
surprise given the company’s penchant for secrecy.

Some investors remain confident the Apple magic remains.

“The bar has been reset in terms of expectations and
guidance. They have done the right thing by issuing debt and
doing a large buyback,” said Jason Jones, who runs tech hedge
fund firm HighStep Capital and confessed to being an Apple bull.

“The company will go through this quiet period for product
release and then, starting in the summer and for the remainder
of the year, product announcements will pick up and likely the
stock will react favorably to that.”

While Apple is still growing — no small achievement for a
company with sales well over $100 billion — its pace of growth
has slowed as high-end smartphone adoption approaches saturation
and rivals flood the market with cheaper devices, which are
popular in high-growth developing countries like China and
India.

Cook on Tuesday acknowledged that Samsung, which has
smartphones in all price categories, is its top competitor.
Apple also said it does sacrifice margin in the short-term, as
it did with the iPad mini, if executives believe a product has
long-term potential.

“Apple is in the transition phase from growth to a value
company,” said Tim Ghriskey, chief investment officer of Solaris
Asset Management. “Growth companies tend to put every penny back
in, but that is not the case with Apple here.”

Dzhokhar Tsarnaev, 19, who suffered damage to his tongue when shot through the throat before his arrest, was initially under sedation and incapable of being interviewed by investigators, authorities said. He also had been shot in the leg.

But the ABC and NBC news networks reported late on Sunday that Tsarnaev had regained consciousness and was responding in writing to questions put to him by authorities.

Much of investigators’ attention has turned to a trip his older brother and fellow bombing suspect, Tamerlan Tsarnaev, took to Russia last year and whether Chechen separatists or Islamist extremists may have influenced or assisted the siblings.

The two brothers emigrated to the United States a decade ago from Dagestan, a predominantly Muslim region in Russia’s North Caucasus mountains.

Tamerlan Tsarnaev, 26, died after a Thursday night gunfight with police on the streets of Watertown, the Boston suburb where authorities finally cornered his younger brother after a massive manhunt that shut down greater Boston on Friday.

Dzhokhar Tsarnaev, a naturalized U.S. citizen, was found spattered with blood and hiding inside a covered boat parked in a Watertown back yard. He apparently was hit by gunfire in the shootout that left his brother dead, but it was not clear whether he suffered additional wounds in a final hail of bullets that preceded his capture.

U.S. Attorney Carmen Ortiz, the federal prosecutor for the Boston area, was preparing criminal charges, according to Boston Police Commissioner Ed Davis. It was not clear when charges would be filed. Prosecutors did not plan any news conference or announcements on Sunday.

The suspect was watched by armed guards in the intensive care unit of Beth Israel Deaconess Medical Center, where his brother was pronounced dead early on Friday.

“He is not in a condition to be interrogated at this point in time,” Davis said in an afternoon news conference.

Davis said earlier police discovered at least four unexploded devices, including one similar to the two pressure cooker bombs used in the twin blasts Monday that killed three people and wounded more than 170 near the finish line of the Boston Marathon.

“I personally believe they were (planning other attacks),” he told CBS television’s “Face the Nation.”

The men’s parents, who moved back to southern Russia, have said their sons were framed.

Tsarnaev was shot in the throat, U.S. Senator Dan Coats, a member of the intelligence committee, told ABC. A source close to the investigation told Reuters he had tongue damage.

“We don’t know if we’ll ever be able to question the individual,” Boston Mayor Thomas Menino said Sunday, also on ABC’s “This Week” program.

Runners in the London Marathon held 30 seconds of silence before starting their race on Sunday, while people from the greater Boston area that had been on virtual lockdown all day Friday remembered the victims in church services.

“We must be people of reconciliation and not revenge,” Roman Catholic Cardinal Sean O’Malley told a packed Cathedral of the Holy Cross. “The crimes of the two young men must not be justification for violence against Muslims.”

In the neighboring city of Cambridge, police stationed themselves across from a home where various members of the Tsarnaev family had lived, advising gawkers and bystanders to move on.

Patricia McMillan, who lives two doors down, said she last saw Tamerlan Tsarnaev in the neighborhood the Wednesday before the bombing, noting he had shaved off his beard and that he was smoking.

TRIP TO RUSSIA

Tamerlan Tsarnaev traveled to Moscow in January 2012 and spent six months in the region, a law enforcement source said.

That trip, combined with Russian interest in Tamerlan communicated to U.S. authorities and an FBI interview of him in 2011, have raised questions whether danger signals were missed.

It was unclear if he could have had contact with militant Islamist groups in southern Russia’s restive Caucasus region.

A group leading an Islamist insurgency against Russia said on Sunday it was not at war with the United States, distancing itself from the Boston bombings.

“We are fighting with Russia, which is responsible not only for the occupation of the Caucasus but for monstrous crimes against Muslims,” said a statement from Caucasus Emirate militants operating in Dagestan.

The insurgency is rooted in two separatist wars that Russian troops waged against Chechen separatists following the fall of the Soviet Union.

The family emigrated to the United States about a decade ago. The brothers spent their early years in a small community of Chechens in the central Asian country of Kyrgyzstan, a mainly Muslim nation of 5.5 million. They moved in 2001 to Dagestan, a southern Russian province where their parents now live.

Neighbors said they noticed nothing unusual about Tsarnaev, who this summer helped his father renovate his first floor apartment in Makhachkala, a bustling city in Dagestan.

“They say he was a fanatic. I didn’t see that,” said Madina Abdulayeva, 45, who runs the small grocery shop across the pot-holed street where he used to come to chat. “We’re all Muslim here. We’re all part of Islam. We all pray.

(Additional reporting by Mark Hosenball in Washington; Writing by Daniel Trotta; Editing by Vicki Allen and Doina Chiacu)