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Wall Street Gags on Apple

Apple’s experience today was a replay of Intel last week.

Bellwether reports a generally brilliant quarter but the pundits don’t like its projections for this quarter and think can do better, so its stock is beaten to a pulp and the poison spreads to the rest of tech, which is exactly what is likely to happen tomorrow, adding to the mounting debris on Wall Street.

Apple reported simply the best quarter in its history. It beat anybody’s forecasts.

Mac, iPod and iPhone sales broke any previous records even if iPod was flat.

The company earned $1.58 billion, or $1.76 a share, on revenues of $9.6 billion. Earnings were up 57% year-over-year. Revenues were up 35%. Apple’s gross margin was up three-and-a-half points to 34.7%.

International sales, not Apple’s strongest suit lately, accounted for 45% of the quarter’s revenues.

It shipped 2.32 million Macs, up 44% in units and up 47% on revenues generated year-over-year.

It sold 22.1 million iPods, up a relatively weak 5% in units and 17% in revenue over last year. Analysts wanted it to do between 22.4 million and 25 million of the widgets setting off worry about the strength of the American consumer.

iPhone was good for 2.3 million units during the quarter for a total of four million units between the time it first became available and last week when Steve Jobs walked on stage at MacWorld.

The results produced cash flow from operations of over $2.7 billion, yielding a cash balance of over $18.4 billion, which CTO Paul Oppenheimer suggested could be used for acquisitions, not something Apple has much practice in.

However Apple, which is notoriously conservative, only expects revenues of about $6.8 billion this quarter and earnings of about 94 cents when Wall Street was counting on $1.09 on $7 billion.

Oppenheimer refused to play economist and prognosticate about the US economy, resisting any temptation to be lured into any characterization other than normal seasonality.

In after-hours trading Apple’s stock, up only a couple of weeks ago to over 200 bucks, hit $138 and change, down $17.50 on the day, which was already down more than five bucks.


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