Apple Eats Bears, Feeds Bulls, Banks $100 Billion

Editor's note: An earlier version of this article included incorrect sales figures. The Motley Fool apologizes for the error.

The numbers are in. Apple (Nasdaq: AAPL  ) booked $12.30 a share in profits on $39.19 billion in revenue. Analysts were expecting just $10.06 a share of profit on $36.81 billion in revenue, according to Yahoo! Finance.

Fools and Wall Street alike were hoping for a blowout like this. After a run of rotten reports from the likes of Netflix (Nasdaq: NFLX  ) and Riverbed Technology (Nasdaq: RVBD  ) -- both of which issued disappointing guidance -- investors were virtually pleading with the Mac maker to rekindle institutional interest in big tech names.

Good news, Fools. They're back. And they're buying. Shares of Apple are already up more than 6% after-hours. Expect an even bigger rally tomorrow, when investors remember that Apple has a long history of delivering, though we've seen misses before. The last time (i.e., during Q4), the stock pulled back more than 10%.

Not this time. This time -- like so many times before -- Wall Street got punked. And not just on the top and bottom lines. Analysts fell far short in their estimates of iPhones, iPads, and Macs sold during Apple's fiscal second quarter:

Product Sold

Actual

Median Projected

Last Year

Y-o-Y Growth

iPhones

35.06 million

30.59 million

18.647 million

87.99%

iPads

11.88 million

11.74 million

4.694 million

151.87%

Macs

4.02 million

4.07 million

3.76 million

6.83%

Sources: Fortune Magazine, SEC filings, Apple press release

What's more, concerns that cut-rate hardware competitors such as Amazon.com's (Nasdaq: AMZN  ) $199 Kindle Fire would force Apple to drastically cut prices seems to be overblown. Gross margin improved 6 full percentage points year over year, to 47.4%.

Impressive, right? Not really. Not when you consider that Apple now has more than $100 billion in mostly liquid assets on its balance sheet, thanks mostly to generating $14 billion in cash from operations over the past three months.

In essence, it's as I said last quarter: There's rich, there's stupid rich, and then there's Apple. There's no other company like it in the world, which is why I'm keeping my shares and an outperform CAPScall. Think I'm wrong? So be it. There are plenty more safe bets trading on the cheap, including these six stocks that top professional investors are buying now.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Netflix, and Riverbed Technology at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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


Read/Post Comments (10) | Recommend This Article (37)

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 April 24, 2012, at 5:54 PM, EnigmaDude wrote:

    But they issued downside guidance for next quarter, which could temper the gains a bit once investors realize that the growth is going to slow down going forward.

  • Report this Comment On April 24, 2012, at 5:58 PM, ggunnr1 wrote:

    I think your chart is using fiscal Q1's numbers.

  • Report this Comment On April 24, 2012, at 6:06 PM, TheDumbMoney2 wrote:

    Enigma, compare their "downside guidance" for Q3 with last year's Q3. That is the relevant metric. And they are setting the bar deliberately low, because 4s will be nearing retirment by then.

  • Report this Comment On April 24, 2012, at 6:11 PM, Fruitfan wrote:

    I doubt anyone will care about the Q3 guidance since Apple always goes very conservative with guidance and Q3 should be lower since many will hold off buying the 4s knowing the iPhone 5 is coming soon.

  • Report this Comment On April 24, 2012, at 6:22 PM, TMFMileHigh wrote:

    @ggunnr1,

    Yes, you're right. My bad. The numbers have since been corrected by my ace editors.

    Thanks for the comment -- really appreciate it.

    Foolish best,

    Tim

  • Report this Comment On April 24, 2012, at 6:46 PM, Chontichajim wrote:

    The number that surprised me was 114% growth in East Asia (minus Japan), essentially China. That is without the number 1 or 2 Wireless carriers yet. Hope the U.S. market doesn't become irrelavent to them.

  • Report this Comment On April 24, 2012, at 6:54 PM, alexanderantonio wrote:

    Should have re-upped at 560 this morning like my gut told me : /

  • Report this Comment On April 24, 2012, at 7:09 PM, 1984macman wrote:

    Just to make it crystal clear, the 2012 iPhone (get used to it - no more numbers!) isn't coming until October. Apple had a spectacular holiday quarter in large measure because they moved the iPhone release date three months closer to Christmas, Hanukkah, the Chinese New Year, etcetera. There will be NO big dip in iPhone 4s sales until Apple's FY Q4. Period. End of discussion.

    Sheesh! You'd think you people would learn after having been slapped upside the head the last two quarters in a row....

  • Report this Comment On April 24, 2012, at 8:35 PM, DoctorLewis4 wrote:

    I feel the pain of all my friends who listened to the run for the hills bleating by the "experts" and sold Apple last week. Reminds me of the old Chico Marx line: "Who you gonna believe - me or your own two eyes?"

  • Report this Comment On April 24, 2012, at 8:45 PM, rjonesthree wrote:

    Traders. Gotta love 'em. They opened up a nice little buying opportunity over the past week! For myself, I'm long AAPL (bought at $318) -- meaning I don't sweat the quarterly hysterics. My horizon is 5 years.

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