Apple (NASDAQ:AAPL) has had a rough week. First, cult-CEO Steve Jobs announced a leave of absence due to health concerns. Then shareholders had to stomach a roller coaster from down 10% back to down 2% by end of day.
Now, things are turning. Apple just beat earnings with revenues jumping 70%. Shares are up 2.75%.
What do we think?
Apple crushed Wall Street expectations. Revenues came in at$26.74 billion versus Wall Street expectations for $24.4 billion. Net income came in at $6 billion ($6.43 a share) versus expectations for $5.38 a share.
However, Apple has a habit of handily beating their well managed expectations. So let’s look at the product shipments:
iPad: 7.33 million (beat)
Mac: 4.1 million (missed)
iPhone: 16.2 million (beat)
Apple also offered strong guidance. The tech company projects $22 billion in sales ($20.6 billion expected) and earnings of $4.90 a share.
What are the risks going forward?
Steve Jobs health, Steve Jobs health, Steve Jobs health. Did I mention Steve Jobs health? This is the single more important catalyst on Apple’s stock in the near term.
Other risks include an inability for Verizon (NYSE:VZ) to handle the new load of iPhone customers, and any delays associated with the next-generation iPad.
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