This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Street Finds a Few Worms in Apple

Updated from 7:42 a.m. EDT

Apple's (AAPL) second-quarter earnings topped Wall Street's estimates by 10 cents a share, and the company offered an earnings outlook that was better than expected. But investors weren't impressed, selling off the stock.

Shares of Apple were recently off $2.55, or 6.2%, to $38.48 in early trading Thursday.

Indeed, despite the strong results, analysts on a conference call found a number of items to quibble with. For instance, the company's third-quarter guidance -- while above the Street's estimates -- implies that sales will be flat compared with the second quarter and earnings will decline, several analysts noted. Some also observed that Apple's share count ballooned 13% in the quarter, diluting earnings.

The expanded share count had to do with stock options exercises in the quarter, CFO Peter Oppenheimer explained on the call. In terms of the company's guidance, it reflects Apple's normal seasonality and still would represent a 61% growth rate over the year-ago quarter, he said.

"We're very pleased with the results of our first half of our fiscal year," he said. Apple is looking forward to the second half, he added.

Oppenheimer had a lot to be pleased with in the second quarter, as Apple's earnings were six times greater than they were in the year-ago period. In the just-completed quarter, Apple earned $290 million, or 34 cents a share, which was up from $46 million, or 6 cents a share in the year-ago period.

The company's sales jumped 70% to $3.24 billion.

Those results were well ahead of both analysts' expectations and the company's own guidance.

The consensus on the Street was for 24 cents a share in earnings on $3.21 billion in sales, according to Thomson First Call. Apple predicted in January that it would earn 20 cents a share in the just-completed quarter, on $2.9 billion in sales.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs