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Expert View - Apple shares jump after quarterly results

india Updated: Apr 27, 2012 18:11 IST

Reuters
Highlight Story

Strong iPhone sales propelled Apple Inc's quarterly results past Wall Street's expectations, driving the company's shares up more than 7 percent.



Commentary:

Michael Holt, Equity Analyst, Morningstar

"Very solid results. Apple's gross margin expanded up to 47 percent in the same quarter that they exceeded expectations on unit shipments for iPhones and iPads. That shows they are able to maintain their pricing without compromising on growth."



"There are lower-priced alternatives from the Android world that are becoming more compelling. The concern was that Apple might sell more older models to be more competitive. That would have shown up in the gross margin. But aggregate gross margin and average revenue per device show that this hasn't happened."



"They are still leading with the new, flagship models and getting great traction with those. People are buying the iPhone 4S instead of the iPhone 4. The same is happening on the new iPad versus the older iPad 2 - although that launch happened later in the first quarter."



"Long-term concerns about a product mix shift are still there but we do not expect this for some time. That's the three-year concern. These results show that this is not happening in the short term at all."



Patrick Becker JR., Principal, Becker Capital Management, Which does not own Apple shares

"There's no doubt looking in the last quarter and the Christmas season, Apple has executed very well. But you are starting to see the iPad start to reach some sort of saturation with the current product. These are the transitions you start to have without coming out with a brand new device. They have been extremely successful at bringing out new categories and it is new products that will drive up the stock price."



Carolina Milanesi, Analyst, Gartner Research

"What is interesting is the iPhone number because it continues to prove their strength in the market. There have been a lot of questions about whether Apple can continue to sustain the growth now that they have reached all the markets that they need to reach and the operators they can partner with. The Q1 results ... prove they still have strength in their products."



Colin Gillis, Analyst, BCG Financial

"That 35 million iPhone number is fantastic, that along with the margin profile for the company. We use to always say this is a two product company but this quarter, it's really all about the iPhone."



"You've got to worry a little bit about the iPad numbers, a little lighter than expectations. We'll see if that's just due to the product rollout."



"But given that the iPhone is carrying this company right now, if it's October before there's another refresh in that product line, is there any fatigue in the current demand? In developed markets, more than half of consumers already have smartphones."



JJ Kinahan, Chief Derivatives Strategist, TD Ameritrade

"Apple had a blowout quarter. There were already high expectations and they blew the expectations away. For Wednesday, the pattern for Apple in the past post earnings has often been a sell-off even after beating expectations. Traders will be watching the stock closely and volatility in the weekly Apple options expiring this Friday may come in considerably whereas the monthly options volatility may hold up in comparison."



"We have seen many call speculators over the past few days in Apple and if the stock holds at current levels, they will be rewarded, which should lead to interesting activity at the opening on both Apple stock and options."



Shaw WU, Analyst, Sterne Agee

"The margins were really strong, so the concern around the carrier subsidies, pricing pressure, that was overdone. This shows you they have a ton of pricing power, not just with consumers -- but with carriers as well."



"AT&T and Verizon are important carriers but they're two of about 150 carriers. Obviously from this report, they're still important but they're becoming less important."



Michael Walkley,

Analyst

,

Canaccord Genuity

"Very strong results across the board. iPhone sales of 35 million were better than everyone's expectations."



"It's much better international sales, given what we already knew about a slowdown at AT&T and Verizon. International markets continue to grow."



Mark Mckechnie, Analyst, Thinkequity

"The quarter looked pretty good. Despite some concerns going in, the iPad came in line, at just under 12 million units. It was a touch light but don't forget you're in a transition quarter with a new product."



"It looks like strength came from iPhones. International must have helped out there. In terms of the guidance, it's generally conservative. It's typically conservative."



On recent stock declines: "The stock has had a pretty big move from mid 300s to close to mid 600s. So the stock took a breather. There were concerns about overall seasonality, the transition from a new iPad and I think there were also concerns over iPhones. This is not out of the ordinary for a stock but the first look at these numbers are pretty good."



Kim Forrest, Senior Equity Research Analyst, Fort Pitt Capital Group in Pittsburgh

"I thought it was very strong - but I'm picking nits now. I'm looking at the zero growth of Macs, wondering what that means. We can write the iPod off, we know that is going to decline. I can't wait to hear commentary about margins with respect to the iPad. It's intriguing to me that they have been selling more expensive technology at the same price as last year's model."



"The strength of the iPhones, especially in light of recent earnings announcements from its two largest carriers in AT&T and Verizon really put to bed the issue that there might be a problem with the iPhone."



Michael Yoshikami, CEO, Destination Wealth Management (Previously Called YCMNET Advisors)

"Apple once again surprises on the upside despite expectations that iPhone sales would lag. Clearly iPad results are driving results, as well as international sales. This is consistent with Apple continuing to capture market share against Android."



"I think when you have a strong rally in a stock it often sells off for no better reason than uncertainty. I think you're going to see the naysayers go away."