Apple Inc (APPL) Has a Record Quarter

The analysts were telling us that the quarter coming from Apple Inc would be very good with their regular increases in earnings estimates but the street was surprised at how good the quarter turned out to be. For the third quarter ending in June, Apple reported revenue of $15.7 billion and a profit of $3.25 billion. This beat street estimates by 12.5%. The company’s fifth quarter in a row of surprising to the upside on earnings.

New product launches and old product successes are leading to good gains in revenue and profit compared to prior quarters, year over year. Apple sold 3.47 million Macs, 8.4 million iPhones, and 9.41 million iPods. I thought every one already had an iPod. Even the newly released iPod came in with really good numbers selling 3.27 million in the quarter. On top of all that, gross margins were better than expected at 39.1% according to a WebProNews article.

The iPhone 4 Upload Speed issue that was recently mentioned here wasn’t an issue in this earlier period. And the company made a point during their conference call to mention that the planned free case solution will only cost a small fraction of the profits that company is making during the current quarter. This was in contrast to the other items mentioned during the call that could possibly limit the quarters results. But probably will not affect the overall numbers according to FastMoney traders commenting during the call.

Analysts have increased the expected earnings for the quarter ending in September from $3.80 a share to $3.81 a share just this week. The estimate three months ago stood at $3.43 a share. The stock has underperformed this growth and is decently priced at a PEG ratio of 1.03. I think you can buy at currently levels and hold as long as the overall markets do not retreat but improve over the coming months.