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Apple Smashes Expectations in its Fiscal Q3 Earnings Report

|Includes:Apple Inc. (AAPL), AMZN, ATT, BBRY, BIDU, CSCO, DIA, GOOG, GOOG, HPQ, IBM, INTC, MSFT, NOK, QQQ, SPY, VZ
Apple absolutely demolished Wall Street estimates posting yet another $1 billion beat on the top line when it released its fiscal third quarter earnings results this afternoon. Shares of the tech giant moved up in after hours as investors welcomed strong results across the board. Apple reported $3.51 in EPS on $15.7 billion in revenue compared to analyst expectations of $3.10 in EPS on $14.74 billion in revenue. Apple also added $4 billion in cash to its war chest bringing the total just above $45 billions.
Apple's earnings were driven largely by sales of 8.4 million iPhones, 9.4 million iPods, 3.27 million iPads, and 3.47 million Macintosh computers. And in spite of the law of large numbers, Apple posted a high flying 61.4% revenue growth and 74.6% EPS growth when compared to the year-ago quarter.
Yet, the big story in this report is Apple's aggressively confident revenue guidance for the September quarter. I've never seen Apple provide guidance so far above the consensus in the several years I've followed the company.
Analysts were expecting Apple to guide for about $17 billion in revenue for Q4. I was actually expecting to see guidance in the range of $16.8 billion consistent with Apple's habit of guiding below the street's expectations. Yet, Apple came right out of left field and aggressively guided for $18 billion for the September quarter all but indicating that revenue will likely come in at the higher end of $19 to $20 billion. I'll be exploring this issue in far more detail in a full review of the earnings release later this week.
Another big story in this report is whether Apple (NASDAQ:AAPL) will surpass Microsoft (NASDAQ:MSFT) on the top line for the first time in the company's history. Analysts polled by Thomson Reuters expect Microsoft to report earnings of $0.47 a share on $15.27 billion in revenue. Unless Microsoft far surpasses analyst estimates, Apple's $15.7 billion in revenue appears to have put Apple ahead of Microsoft for the quarter. You can read my full report of this story at CNN Fortune.
I'll be doing a more detailed analysis of Apple's earnings and what it means for Q4 later this week. Stay tuned.

See also:
Apple Fiscal Q3 2010 Earnings Preview
Apple Closes in on Microsoft in Revenue Race
How Apple Maintains Explosive Earnings Growth
Philip Elmer-DeWitt's Apple Earnings Preview

Disclosure
: At the time of this writing, the author holds Apple 2012 $300 call options purchased ahead of Apple's fiscal third quarter results. The information contained in this blog is not to be taken as either an investment or trading recommendation, and serious traders or investors should consult with their own professional financial advisors before acting on any thoughts expressed in this publication.
Stocks: AAPL, MSFT, BBRY, GOOG, AMZN, QQQ, DIA, SPY, CSCO, IBM, INTC, HPQ, VZ, ATT, GOOG, NOK, BIDU