Apple Beats Street

| About: Apple Inc. (AAPL)

Apple's (NASDAQ:AAPL) FQ1 EPS of $3.67 beat consensus estimates of $2.07, although a change in Apple's accounting methods make apple-to-apple comparisons (sorry!) questionable. Revenue of $15.68B vs. consensus of $12.06B. Sees FQ2 EPS of $2.06-2.18 vs. consensus of $1.77, and revenue of $11-11.4B vs. $10.4B consensus. Gross margin rose to 40.9% vs. 37.9% a year-ago. (10-Q)

Apple shares have traded up and down after-hours, and are +3.4% AH to $204.40 as of 5:40 p.m.

Initial reactions from SA's earnings panel:

Apple just screwed the shorts by releasing this non GAAP without telling anyone. Nobody knows what to say about these monster numbers. - Jason Schwartz

It was a monster season for PCs as well. However, it seems that the dream market share of 10% for Macs still needs to be reached. - Jamie Moye

Wednesday's event has to be blowout. If it's just a big iPhone, the stock will dive 15%. - AppleInvestor

More analyst comments:

"Mac sales were phenomenal... Macs continue to gain share and what's interesting is that it only has 3.6% share globally so there's a lot of headroom." - Daniel Ernst, Hudson Square

"It's another sneak attack by Apple. The only bad part I saw were the iPod sales down %, but I imagine that they made up by the iPhone." - Keith Springer, Capital Financial

Highlights from Apple's FQ1 earnings release:

  • Apple sold 3.36M Macintosh computers during the quarter, representing a 33% unit increase over the year-ago quarter. The Company sold 8.7M iPhones in the quarter, representing 100% unit growth over the year-ago quarter. Apple sold 21M iPods during the quarter, representing an 8% unit decline from the year-ago quarter.
  • During the quarter Apple elected retrospective adoption of the Financial Accounting Standards Board’s amended accounting standards related to certain revenue recognition. Adoption of the new accounting standards significantly changes how the Company accounts for certain items, particularly sales of iPhone and Apple TV.
  • “If you annualize our quarterly revenue, it’s surprising that Apple is now a $50+ billion company,” said Steve Jobs, Apple’s CEO. “The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about.”
  • “We are very pleased to have generated $5.8 billion in cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2010, we expect revenue in the range of about $11.0 billion to $11.4 billion and we expect diluted earnings per share in the range of about $2.06 to $2.18.”