Ah, the highs and lows of earnings season! Last Thursday, Google kicked off things off and we're already starting to see some pretty memorable results, with companies seeing share prices skyrocket -- or pop. However, the Street can get a bit too focused on the arbitrary short-term targets it sets for companies, overzealously bidding up companies for beating expected earnings by a few pennies or frantically selling off companies that missed earnings but still have a bright future.

Here's a look back at three companies that saw their fortunes plunge after earnings and a peek at whether the Street is missing something.

The laggards

  • Apple (Nasdaq: AAPL)
    Archeologists sifting through ancient records finally found the last instance of an Apple earnings miss. It was way back in the barbaric year of 2002. So you can see why the world let out a collective gasp when Apple released earnings last night that came up short of analyst expectations. Apple's not just used to beating earnings; it's used to crushing them. Yesterday the company fell short of earnings, at $7.05, while analysts were expecting $7.28. Revenue missed as well. Shares closed the day down 5.6%.

    Is the Street right to send Apple shares plummeting? I'll start off by saying I'm not surprised Apple traded sharply down today. It had run up sharply ahead of earnings, moving from $370 a few weeks ago to $422 a share right before earnings were released.

    But I think selling Apple is a mistake. Yes, Apple did miss earnings, but it also had ridiculous guidance looking ahead. The company almost always lowballs guidance; it had projected just $25 billion in sales last quarter, and the "disappointing" sales total came in at $28 billion. For next quarter, it's projecting $37 billion in sales, safely ahead of previous analyst estimates. Throwing in how Apple usually outperforms its guidance, it's safe to say the company should eclipse $40 billion in sales this holiday quarter! The record quarter from the world's largest technology firm, Samsung, was $37 billion sales in a quarter. However, that's not entirely a fair comparison, since Apple makes 23.9% profit margins, versus 8.7% for Samsung.

    From the look of it, Apple's less-than-stellar quarter is mainly the result of a "product gap," with consumers holding out on buying the iPhone 4 last quarter in hopes of getting a soon-to-be-released new phone. With the iPhone 4S now released -- and selling a record 4 million units on opening weekend -- Apple will be back to its record-breaking and analyst-humbling ways next quarter. Don't fret the hiccup in diminished iPhone sales last quarter, as demand will be built up for this quarter. The future still looks bright for Apple.
  • Cirrus Logic (Nasdaq: CRUS)
    Cirrus Logic reported earnings tonight, and investors are not pleased. Earnings came in right as expected, at $0.33 per share, while revenue slightly missed analyst expectations. However, the big number that's probably driving tonight's after-hours sell-off is guidance. Cirrus guided to a midpoint of $105 million in sales next quarter, well below the $108 million analysts were expecting. Shares are down 13% in after-hours trading tonight.

    Is the Street right to send Cirrus shares plummeting? I don't think so. Let's face it: People are buying Cirrus Logic as an Apple play. As of last quarter, 59% of its earnings were through Apple. Cirrus has been pretty upfront about the fact it's working hard to please Apple, but it's also using the opportunity of stable Apple business to reshape its Energy segment.

    So, when I look at today's earnings and see Cirrus' audio business -- what most people are buying the stock for -- holding in strongly and the revenue miss coming from a 39% year-over-year sales drop from an energy segment we knew was in a turnaround mode, I'm not overly concerned.

    We know Cirrus is back in the iPhone 4S, and its relationship with Apple continues to look strong. I'm not selling because energy was a bit weaker than expected this quarter; the fact that it's taking a bit longer to ramp up in a quarter doesn't affect my long-term thesis. If I make any move from these earnings, it'll probably just be picking up more shares at a depressed price.
  • IBM (NYSE: IBM)
    IBM did last quarter what it does best: deliver solid and reliable earnings gains. Investors, however, were unimpressed. Revenue jumped a strong 8%, but it's never about the revenue with Big Blue. The company is driving earnings gains through focusing on its higher-margin businesses. Following that theme, gross margins bumped up to 46.5% from 45.3% last year. Earnings came in at $3.19 a share, and the company raised full-year guidance. All that, and shares fell 4.1% yesterday.

    Is the Street right to send IBM shares plummeting? Within the context of the quarter, the selloff didn't make much sense. However, IBM has been outperforming just about all of its high-tech peers in the past year. Last summer, I issued a buy recommendation with the Fool's own money on IBM, and even after yesterday's drop the company is still up 43% since that recommendation, beating the market by 34% in that time. That's heady outperformance for such a large player.

    In that context, IBM's drop was probably a reaction to its relative valuation compared with some of its peers. As Hewlett-Packard (NYSE: HPQ) fell apart over the past year, investors ran to IBM, a company that already had the rock-solid business model HP and other IT players have been trying to copy. IBM is still a great business, but its meteoric climb was due for a pause.

    If you're an investor looking for a blue-chip play in the data center, I'd recommend taking a look at EMC (NYSE: EMC), a company I've also bought in real-money Fool services and that's been unfairly beaten down in recent months despite its central placement in the booming storage industry.

That's it for today's earnings recap. To stay updated on all things technology make sure to follow my market commentary on Twitter, @bleekertech, or add any of these companies to our new My Watchlist service. It's free and will deliver all the Fool's best news and analysis on all your favorite companies in one central place. Get started today!