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One of the reasons why Apple (NASDAQ:AAPL) stock was relatively flat after hours was because Wall Street didn’t know what to do with the GAAP accounting change. Too many analysts who should have been ready to interpret the data for their clients were left dumbfounded by the huge earnings beat. Apple begins the day Tuesday with its lowest P/E in years and as revised 2010 estimates come in, the company will have its lowest forward P/E of the Steve Jobs era. This disconnect will not last long. Over the next year, traders will price Apple stock back up towards its historical norm of a 32.7 P/E.

Philip Elmer Dewitt offers up an easy to understand year over year comparison of the numbers:

Total sales: $15.68 billion, up 32% from last year's non-GAAP revenue

Earnings: $3.67 per share, up 46.8% from last year's non-GAAP EPS

Profit: $3.38 billion, up 49.6% from last year

Mac sales: 3.36 million units, up 33% year over year

iPhone sales: 8.74 million units, up 100% from last year

iPod sales: 21 million, down 7.6% from a year ago

iPod touch sales up 55% over last year

50.9 million visitors to Apple 283 stores, up 9% over last year

Gross margin: 40.9%, up from 37.9% last year

The only negative in the report was the weak iPhone unit numbers but were they really that weak? Apple sold 8.7 million iPhones while investors were looking for something in the 9.2 million range. iPhone units still grew by 100% year over year. When you have this kind of growth rate and still fail to meet expectations it tells you a little something about the expectations. They got too high.

It's like my son running into the house after his basketball game yelling with excitement 'Dad! Guess how many points I scored?' And I respond, '43?'

'Ummmm, actually I scored 26'. There is nothing more deflating than expectations that are too high. The analysts who were way too low last quarter got way too high this quarter. They really have no way of measuring sales so it ends up being complete guesswork. Investors will quickly overlook the short term miss because in reality it wasn’t a miss at all.

Disclosure: long aapl
Source: Apple's Earnings - Some Perspective