Apple Inc. Eats Everyone's Lunch - Analyst Blog

The highly anticipated earnings report for Apple Inc.’s (AAPL) once again crushed upwardly revised guidance for the company’s fiscal 4th quarter 2010. Apple Inc. reported new all-time records in quarterly revenue and earnings: $20.34 billion and $4.31 billion, respectively. Earnings per share reached $4.64, once again easily beating the Zacks Consensus Estimate of $4.05 per share for a positive surprise of 14.6%. The latest Zacks Consensus Estimate for revenues was $19.02 billion.

These now common fantastic numbers from AAPL were largely driven by 14.1 million iPhone sales in the quarter. Apple Inc. also sold 4.2 million iPads, and though this product missed company guidance of 4.6 million sales, it was still nearly 1 million more units sold than in AAPL’s June quarter, the first in which the iPad was made available. Mac computers reached 3.89 million units sold in the quarter, an increase of 28%.

Apple Inc. also provided guidance for its December quarter with an EPS figure of $4.80 and $23 billion in revenues. But with AAPL notorious for under-guiding its following quarter — not to mention that holiday season sales should plump up Apple Inc. numbers beyond proportions in the rest of the year — we can obviously take these figures with a grain of salt. The Zacks Consensus Estimate for the December quarter is already $5.03 per share.

Curiously, after a roughly 1% gain in Monday trading before the bell, AAPL shares are down 6.7% in after-market trading. Could it be that investors really believe Apple Inc. does not intend to destroy its guidance once again at this time three months from now? Or perhaps this is a “sell the news, buy the rumor” situation. In any case, Apple Inc. shares currently have a Zacks #1 Rank (Strong Buy), but a longer-term Neutral recommendation.

Apple, Inc. is the second-largest company in the world by market cap, behind only oil supermajor behemoth Exxon Mobil (XOM). In fact, with a market capitalization of $290.5 billion, Apple Inc. is currently bigger than IBM (IBM), Dell (DELL), Research in Motion (RIMM) and Nokia (NOK) — combined!