The bulls continue to battle back from last Friday’s debacle after they pushed the Dow higher by 25 points, or 0.2%, as the index closed at 11,117 on Tuesday. The blue chips started off in positive territory and the bears landed their only punch about an hour later but soon afterwards the bulls stayed on their toes and danced to a closing round victory.
The S&P 500 and Nasdaq managed to stay in positive territory all day and both closed with an exact 0.8% gain.
The S&P added a Bo Derek “10” and finished at 1,207 while notching a major psychological victory by topping the 1,200 level again. Although it’s just a number it was a positive sign that the bulls are still fighting. Meanwhile, the Nasdaq popped 20 points and closed right on the 2,500 level.
For all of the analysts who expected Apple (AAPL, $244.59, down $2.48) to sell-off after reporting earnings, it looks like they might have to cover their short positions at the open.
It’s never a good thing to step in front of a fast-moving freight train but nearly ALL of the talking heads were pointing towards Apple’s history of a post earnings sell-off. However, as some of them are learning this morning, you never short a company that is going through such an incredible product cycle right now.
Apple is growing profits hand-over-fist and knuckled up last night to hit one out of the park. The company shattered Wall Street’s estimates by reporting a profit of $3.1 billion, or $3.33 a share, versus $1.6 billion, or $1.79 a share, in the year-ago quarter. Revenue came in at $13.5 billion vs. $8.2 billion a year ago. Analysts were looking for earnings of $2.25 billion, or $2.45 a share, on revenue of $12 billion.
Apple’s results didn’t include the iPad, which went on sale in earlier this month but you can bet its adding cash to their coffers.
As far as its other products, the company said it sold 2.9 million Macs, up 33% from 2.2 million a year earlier; 8.75 million phones iPhone were sold, up from 3.8 million a year ago, and higher than analysts’ expectations of about 7 to 7.5 million shipments. China sales increased by more than 9x, while sales in Japan and Europe more than doubled. Talk about momentum…
One of the more interesting “rollouts” from Apple has nothing to do with its products (although Steve Jobs said there will be more coming) but the fact that they plan to open up to 50 new retail stores with half of them overseas is another area of growth that analysts are discounting.
Oh, yeah, Apple’s app store has grown to 180,000 applications and they have about $40 billion in cash. Apple put a cherry on top by providing a strong guidance for the current quarter.
Shares of Apple were over $260 in after-hours trading last night and those gains have held as the stock is trading at $258+ this morning in early action. Apple could retreat after this morning’s initial pop but expect analysts to start raising Apple’s price target again.
Futures are a little mixed as we head towards the opening bell. The Dow futures are off by 13 points and are at 11,061 while the S&P 500 futures are off by point to 1,204. The Nasdaq 100 futures, on the heels of Apple’s strong showing, are up 10 points to 2,034.
We have a lot to cover this morning in our Members Area so let’s get to it.