Apple Earnings Surprise: Why Was Wall Street So Wrong?
Apple posted quarterly results that blew past expectationsTuesday, silencing numerous skeptics and making investors wonder how Wall Street could have been so wrong on the tech giant.
"Apple once again surprises on the upside despite expectations that iPhone sales would lag," Michael Yoshikami, CEO of YCMNET Advisors told Reuters. "When you have a strong rally in a stock it often sells off for no better reason than uncertainty—I think you're going to see the naysayers go away."
The tech giant reported fiscal second-quarter earnings of $12.30 a share on sales of $39.2 billion. The company was seen earning $10.04 a share on revenue of $36.8 billion, according to a consensus estimate from Thomson Reuters.
In addition, the company said it sold 35.1 million iPhones in the last quarter, easily surpassing estimates of approximately 30.5 million units.
“The bigger takeaway is that Apple is becoming a fantastic international growth story and it’s difficult to do proper channel checks just with the U.S.,” said Peter Misek, equity analyst at Jefferies. “Estimates are now probably going to be tweaked upwards.”
Earlier today, Jefferies lowered its iPhone sales estimates to between 28 million to 30 million, based on declining activation numbers from major carriers AT&T and Verizon .
Shares of the iPad maker jumped in after-hours trading. The stock fell 2 percent to close at $560.28 in the regular session. The stock has tumbled 13 percent since hitting its all-time high of $644 a share two weeks ago.
"These stocks don't trade straight up or straight down," said Shaw Wu, senior technology analyst at Sterne Agee, adding that the new iPhone 5 and the smartphone's strength in China could drive the stock to $750.
Meanwhile, Apple's product suppliers including Broadcom , AvacoTechnologies and Qualcomm also rallied in after-hours trading following the announcement.
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