Apple Misses Key Estimates, Beats Earnings - Analyst Blog

By Mark Vickery,

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Upon Apple, Inc.'s ( AAPL ) after-market earnings report Monday on the comapny's fiscal 1st quarter of 2014, many numbers came up short of estimates. However, the world's largest tech company reported diluted earnings per share (EPS) before non-recurring items of $14.50, which was a significant beat of Zacks Consensus Estimate expectations of $14.04 per share.

But revenues missed the Zacks Consensus of $57,735 million for the December quarter -- including the all-important holiday season -- when it reported $57.6 billion in quarterly sales. iPhones in particular sold 5 million or so units fewer than expected. Macs and iPads did slightly better than expected, but iPhones make up over half of Apple's sales. Guidance was also below expectations -- $42-44 billion for the company's Q2 March quarter.

That said, Apple continues to set new records with its sales numbers, including new highs in iPhone and iPad revenues. Year over year, earnings are up 5%. A new $3.05 cash dividend has been declared for investors holding Apple stock as of February 10, 2014, and the company's net profit for the quarter was $13.1 billion.

CEO Tim Cook promises to "invest heavily in our future" -- likely meaning new products at some point this year and/or next (and honestly, it does make sense that new innovations should be forthcoming... doesn't it? I mean, this is Apple). The conference call will commence shortly, and perhaps many questions investors still have about Apple will be satisfied by the end of it.

For instance, what of the fate of the cheaper 5c iPhone? Will it go away in the U.S. market, as some have predicted? Will we get some details about Apple's partnership with China Mobile ( CHL )? It's clear Carl Icahn's getting his way at least a little bit with a new dividend issuance, but can we expect a guy like that to remain in silent reverence of Cook's decisions going forward?

In other words, there are roughly about as many questions as you can shake 51 million iPhones at.

On the bottom line, Apple produced a 3.3% positive surprise for its holiday quarter. This is generally in line with what we've seen from Apple in recent quarters, but investors have yet to be impressed of late. It's the main reason AAPL shares have fallen 6% in the after market Monday, after trading down slightly year to date.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: AAPL , CHL , EPS

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