Apple Eats Bears, Feeds Bulls, Banks $100 Billion

Editor's note: An earlier version of this article included incorrect sales figures. The Motley Fool apologizes for the error.

The numbers are in. Apple (NAS: AAPL) booked $12.30 a share in profits on $39.19 billion in revenue. Analysts were expecting just $10.06 a share of profit on $36.81 billion in revenue, according to Yahoo! Finance.

Fools and Wall Street alike were hoping for a blowout like this. After a run of rotten reports from the likes of Netflix (NAS: NFLX) and Riverbed Technology (NAS: RVBD) -- both of which issued disappointing guidance -- investors were virtually pleading with the Mac maker to rekindle institutional interest in big tech names.


Good news, Fools. They're back. And they're buying. Shares of Apple are already up more than 6% after-hours. Expect an even bigger rally tomorrow, when investors remember that Apple has a long history of delivering, though we've seen misses before. The last time (i.e., during Q4), the stock pulled back more than 10%.

Not this time. This time -- like so many times before -- Wall Street got punked. And not just on the top and bottom lines. Analysts fell far short in their estimates of iPhones, iPads, and Macs sold during Apple's fiscal second quarter:

Product Sold

Actual

Median Projected

Last Year

Y-o-Y Growth

iPhones

35.06 million

30.59 million

18.647 million

87.99%

iPads

11.88 million

11.74 million

4.694 million

151.87%

Macs

4.02 million

4.07 million

3.76 million

6.83%

Sources: Fortune Magazine, SEC filings, Apple press release

What's more, concerns that cut-rate hardware competitors such as Amazon.com's (NAS: AMZN) $199 Kindle Fire would force Apple to drastically cut prices seems to be overblown. Gross margin improved 6 full percentage points year over year, to 47.4%.

Impressive, right? Not really. Not when you consider that Apple now has more than $100 billion in mostly liquid assets on its balance sheet, thanks mostly to generating $14 billion in cash from operations over the past three months.

In essence, it's as I said last quarter: There's rich, there's stupid rich, and then there's Apple. There's no other company like it in the world, which is why I'm keeping my shares and an outperform CAPScall. Think I'm wrong? So be it. There are plenty more safe bets trading on the cheap, including these six stocks that top professional investors are buying now.

At the time this article was published Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Netflix, and Riverbed Technology at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Riverbed Technology, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Riverbed Technology, Apple, Amazon.com, and Netflix, writing covered calls on Riverbed Technology, and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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