Apple Beats But Sells Off; Plus SBUX, CBS And More

The much-awaited Apple Inc. (AAPL - Free Report) fiscal Q4 earnings results have hit the tape a half hour after the end of regular-day trading, with headline beats for both earnings and sales: $2.91 per share was both above the $2.79 expected and 40% higher than the year-ago quarter, and revenues of $62.9 billion topped the $61.5 billion Zacks consensus estimate. However, shares are selling off 3.7% in late trading as analyst peek under the hood:

iPhone sales in the quarter totaled 46.9 million, which was down a bit from expectations of 47.5 million. Yet the Average Selling Price for the iPhone was better than anticipated at $793. Gross Margins for the quarter reached 38.3% and growth in the all-important Chinese market rose 16%, both of which were relatively in-line with estimates. Services grew 17% to $10 billion, minus a one-time adjustment the company reports would have sent this segment up 27% in the quarter.

Guidance of $89-93 billion for its Q1 holiday season, with expected gross margins between 38-38.5%, seems to have not impressed late-traders, however, considering the sell-off. But after hitting all-time highs a month ago, giving the company the first ever trillion-dollar market cap, and up 32% on the year means anything less than a blowout performance — or at least blowout guidance for Q1 (which Apple never provides) — will bring out the knives. Depending on where the stock enters Friday morning trading, the Zacks Rank #3 (Hold) stock may pose a buying opportunity.

Starbucks (SBUX - Free Report) impressed investors this afternoon with solid beats on both top and bottom lines in its fiscal Q4 report: 62 cents per share outpaced the Zacks consensus by 3 cents, on revenues of $6.30 billion that surpassed expectations of $6.2 billion in the quarter. Same-store sales were particularly strong, +3% globally, with 4% gains in U.S. comps and +1% in China, Asia Pacific. These comps numbers were all better than expected, and shares are up strongly in late trading, +7.3% at this hour. For more on SBUX’s earnings, click here.

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Thorgood 1 year ago Member's comment

The giant flaw in Zack's service is that it is so reliant on earnings which is fraught with all kinds of issues too numerous to go into detail here. If and when we change to a 6 month reporting metric vs the present one, Zacks will be even less effective. I don't find their stock valuations worth much. Apple is a hold but buy it if it dips? Contradiction, much Mr Zacks?