Dear Wall Street: Apple Punked You. Again.

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This afternoon, Apple (Nasdaq: AAPL  ) reported $7.79 in per-share earnings and $28.57 billion in revenue for the fiscal third quarter. Analysts had been calling for $5.80 and $24.92 billion, respectively. Only Steve Jobs could make pundits look this silly.

And that's not even the most embarrassing part. With almost everyone calling for strong but not outrageous handset sales ahead of the release of the iPhone 5 this fall -- 15 million to 17 million, specifically -- Apple sold more than 20 million of the devices. Somebody call Ashton Kutcher. Wall Street just got punked. Again.

Some other facts about the rapidly expanding iEmpire from the Q3 report:

  1. Mac unit sales rose 14% while revenue improved 16%. All told, Apple sold $5 billion worth of computer hardware in Q3.
  2. While Android tabs from Samsung and Motorola Mobility (NYSE: MMI  ) struggle to give consumers the on-demand video they crave, Apple sold 9.5 million iPads.
  3. With more than $75 billion in cash and short- and long-term investments on its balance sheet, Apple now has the fiscal heft of a small Caribbean dictatorship. All that's missing are the communism, cigars, and first-rate Major League pitching prospects.

How difficult it must be to work at Research In Motion (Nasdaq: RIMM  ) , Nokia (NYSE: NOK  ) , or any Apple peer right now. For all the talk of viable alternatives to its iDevices, the numbers suggest that consumers are having none of it. They're hooked on iCandy, and delivering sweet profits to Apple and its investors as a result.

Will they keep buying? Will you buy shares? Please vote in the poll below and then leave a comment to tell us whether you've boarded the iBandwagon. You can also add Apple to your watchlist for up-to-date analysis on the stock as soon as it's published.

Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (29) | Recommend This Article (39)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 19, 2011, at 6:03 PM, mongoose1969 wrote:

    I am now fully positioned in AAPL. Let the good times roll!

  • Report this Comment On July 19, 2011, at 6:08 PM, Oldfool103 wrote:

    Well, I had to badger my "advisors" to buy some Apple for me after the iPhone came out. Then I bought some more in the past year. (My hope was to undo some of the damage they did with their buy and drop philosophy following the crash.) Now they are on me to sell it out as it puts the accounts out of balance. So I guess I will sell some at $400 and wait another couple of quarters to see if we get near $500. By that point, I am hoping to have hired some smarter advisors.

  • Report this Comment On July 19, 2011, at 6:18 PM, bugnuts wrote:

    Put everything I had in AAPL years ago. My investment adviser thought I was a moron.

    Yep that's me: A stinking filthy rich moron.

  • Report this Comment On July 19, 2011, at 6:23 PM, robmcfarland wrote:

    i bought APPL shares at $15.00 in 2002...still hold every one from the 2002 investment as well as bought more when APPL hit $90.00 in 2008...I would like to personally thank every man, woman, and child on the planet that owns an Apple product!

  • Report this Comment On July 19, 2011, at 6:24 PM, Threemind wrote:

    I work with Apple computer from 1989, has always been the best, others can only copy to worse.

    If you try an iPhone all the other devices are fluffy and i hope that every quarter beats forecasts is another step towards the healing of Steve Jobs. Apple forever!

  • Report this Comment On July 19, 2011, at 6:35 PM, jekoslosky wrote:

    I finally gave in and bought some Apple earlier in the year (more on that here: and it's now better than 12 percent on my portfolio.

    Bottom line is it looked dirt cheap at $320 or so.

    And even now, with that blowout quarter, it looks cheap at $400.

    Unlikely that's I'll be adding, however, since I don't like any position taking up too large a percentage of my holdings.

  • Report this Comment On July 19, 2011, at 6:51 PM, Davewrite wrote:

    apple is going up way higher

    besides all the positives, analysts have not fully realized Apple's full potential in China and the rest of Asia.

    Touch Screen tablets are the 'PCs' of the non English speaking Asian world because it's much easier to write Chinese etc on a tablet than type it on a keyboard! (earlier in my life I have lived in Asia for some years and realized this immediately, in many offices workers still write notes by hand etc because the workers can't type english )

    Apple realized this years ago and quietly positioned itself to win in Asia.

    For example:

    - Years back Apple quietly bought Chinese character recognition technology HWpen.

    - Hired Andrea Jung to the Board of Directors, an Asian American marketer who is supposed to have knowledge of the Asian markets

    - Announced nearly half it's new Apple stores will be in China.

    - made the iPad very competitively priced

    The highest profit Apple store is in Shanghai.

    Ipads are being used in some Asian schools and military.

    Hon Hai etc are planning to open 500 outlets in China to sell apple products, talks are on the way to sell iPhone on China Mobile (700 million subscribers) etc.

    Apple's sales are going to skyrocket.

  • Report this Comment On July 19, 2011, at 7:31 PM, MyDonkey wrote:

    In the past 20 quarters, how many times have analysts underestimated Apple's earnings? And revenue?

  • Report this Comment On July 19, 2011, at 7:33 PM, TMFLouis wrote:

    What, no option for us that already own and plan to sit tight and enjoy the ride?

    Very long AAPL


    (written on my iCrack)

  • Report this Comment On July 19, 2011, at 7:36 PM, 1984macman wrote:

    As I said in another forum, Apple is woefully undervalued. How undervalued? Even at $400/share, Apple's P/E ratio will DROP tomorrow to less than16. Last December, it was over 20, and historically it has averaged 30. To regain a P/E ratio of 20, Apple would have to go to $505/ share BEFORE NEXT QUARTER.

    $600/share by January of 2012. Believe it.

  • Report this Comment On July 19, 2011, at 8:41 PM, XMFSocialME wrote:

    Years ago my dad asked my brother and me to pick stocks to include in our portfolios. When I came back with Apple (AAPL) (and only Apple) he told me it was a terrible company and I needed to choose more than a one company to diversify my portfolio. At the time it was trading at $27 of which I still have all the original shares today. Finally he agreed and went all in on Apple in hopes of teaching me a lesson. Lesson learned: Find a company you believe in, with smart management (Steve Jobs) and most importantly strong consumer appeal. This curiosity for finding the cutting edge is something I believe no one should be without.

  • Report this Comment On July 19, 2011, at 8:51 PM, voyagergirl wrote:

    I bought a few shares of AAPL in 1997, when it was about $18 a share. I held them until last fall, when I sold the last of the shares. I wish I had kept them!!! I am considering getting back in.

  • Report this Comment On July 19, 2011, at 9:50 PM, harispicks wrote:

    Please explain. How can there be consumer f****ing weakness if Apple products are flying at the rate of millions??

  • Report this Comment On July 19, 2011, at 10:04 PM, mcash454 wrote:

    I know it's natural to be excited about the huge run Apple's had....I know I would be if I'd bought early on. The only reason I'm staying out is because Steve Jobs is not a healthy dude, and when he passes away there is going to be a LOT of selling. I'm not saying that Apple can't continue its run even after Jobs is gone, but people WORSHIP him.

  • Report this Comment On July 19, 2011, at 10:57 PM, drjmac5 wrote:

    Thank you, Steve Jobs et al, for basically reinventing our world, for never settling for mediocre, and for making us richer. I do not need a dividend. Just keep on doing what you and your superhuman company have always done -- which can only be described in terms of creation -- and we shareholders will be just fine.

  • Report this Comment On July 20, 2011, at 4:27 AM, thedubliner wrote:

    excellent posts guys, really interesting to see that Asia may be the geo with highest future potential. Thanks for contributing to the fool!!!!

  • Report this Comment On July 20, 2011, at 7:40 AM, ayaghsizian wrote:

    I bought in a while ago because the tremendous growth potential in Asia is not reflected in the PE ratio. How is a wonderful company with huge growth prospects valued like it's going to grow at a 10% pace the next few years.

    It was financially irresponsible to not have money invested in AAPL when they came out with original Ipad earnings report.

  • Report this Comment On July 20, 2011, at 7:44 AM, Mtnpicker65 wrote:

    Love that headline! Luv my Apple Stock!!

  • Report this Comment On July 20, 2011, at 8:15 AM, David369 wrote:

    Steve Jobs might have a caustic personallity and I sure as heck wouldn't want to work for him. But you have to admit that even though he made a few basic marketing mistakes way back when Apple/Mac started out, that guy turns out the gadgets that people want and generates tons of money. You might say he is the Grinch that stole Xmas from other companies.

  • Report this Comment On July 20, 2011, at 9:23 AM, rav55 wrote:

    For $65 billion, Greece can be bought! The Germans would love Steve Jobs and he could sell more iBling in the EU!

    So forget about a Carribean dictatorship.

    Apple should buy Greece!

    When is everyone going to realise that Wall Street analyists are idiots.

  • Report this Comment On July 20, 2011, at 9:54 AM, mckenzi4 wrote:

    it seems that AAPL can do no wrong on these boards. any thoughts on how buffett's saying applies here?

    "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful"

  • Report this Comment On July 20, 2011, at 9:59 AM, financeguy85 wrote:

    When every comment on a post is from a person saying they are putting their entire net worth into a stock without any real insight or analysis, it's time to get out.

  • Report this Comment On July 20, 2011, at 10:00 AM, INEAUX wrote:

    Always been an Apple fan, even in the dark days between Jobs (although it's better with him), and always hope to be...

  • Report this Comment On July 20, 2011, at 10:36 AM, LAVol wrote:

    AAPL is almost 20% of my portfolio, so I can't justify buying more. My first purchase of AAPL was in Jan. '06. When figuring in option trades, my cost basis is now -$2.28. I'll probably wait for the next major pull-back and either buy deep in the money calls or sell out of the money puts.

  • Report this Comment On July 20, 2011, at 11:58 AM, crewchachi wrote:

    Seems like AAPL will have a dip from the high at which it opened, then languish for a bit, and then eventually break the 400 mark. Seems like a bad time to buy when the run-up to the earnings release just occurred.

    Also, why wasn't a sixth option to the poll included? Seems like this should have been added: "Have shares, but not adding to them."

  • Report this Comment On July 20, 2011, at 2:01 PM, mattwetherell wrote:

    I am currently up a little over 300% on my Apple. I will probably add some more on the next dip but do have to factor in balanced account.

  • Report this Comment On July 22, 2011, at 2:03 PM, Tussie44 wrote:

    Bought AAPL in 1998 and also in 2008. Holding all shares. Creating a portfolio imbalance, and driving my advisor nuts !

  • Report this Comment On July 24, 2011, at 11:27 AM, tallman68 wrote:

    Why do people have advisors that seem to add no value?

    I agree that there should be a poll option of "Own Apple as one of my holdings, holding onto it."

  • Report this Comment On July 25, 2011, at 5:10 PM, LilRedWriter wrote:

    Investing is a new experience for me. I recently rolled my 401k into a Fidelity account. Apple was one of the first stocks I bought. Now up 35% on 150 shares. Better than any other stocks I bought. I will hold onto it for some time. My son is dying for a i-pad, an i-phone and a new i-pod. He's just one of millions so the long-term prospects look good to me.

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