Apple (NASDAQ:AAPL) reported earnings today that beat expectations by five cents per share. Revenue came in at $37.4 billion, which was $540 million below estimates. The revenue number was an increase of about 6% from Q3 2013.
Highlights from the Apple press release include a higher gross margin than expected and a 28% Y/Y increase in revenues for the China segment. Lowlights include weaker than (whisper number) expected iPhone sales, which came in at about 35.2 million units.
In one of my previous articles about Apple titled, "Apple: Worth More Than $130 Per Share", I noted at the time that the consensus forecast for iPhone units was 35 million units and that the AlphaWise Tracker was estimating 39 million units. Both AlphaWise and I turned out to be wrong.
However, at the end of the day it is earnings that counts the most and Apple beat expectations in that department. In another Apple article that I wrote titled, "Apple: Is It Time To Take Profits?", I posited that Apple shares were worth about $130 (post split) and I am sticking to that price target. While Q4 guidance from the company is light, I suspect that is due to the fact that the iPhone 6 is only going to be sold for part of the quarter and buyers are holding out for the new phone. Once sales of the new phone kick in, Apple revenues and earnings will see a strong shot in the arm.
Disclosure: The author is long AAPL. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.