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Apple's Big March Qtr Gives Bulls Reasons To Celebrate

This article is more than 10 years old.

Apple put up some big numbers for the March quarter, beating Street expectations for revenues, profits and especially iPhone sales. The company put up startling good numbers in China and solid sales of iPads. Not least, the company finished the quarter with a starting $110 billion in cash; as noted earlier the company is adding cash at the rate of $100,000 a minute.

The reaction from analysts on the Street: Awe and admiration. Here are some excerpts from Street research on the quarter:

  • Gene Munster, Piper Jaffray: "Apple's March quarter results were meaningfully ahead of Street and buy side expectations despite negative U.S. iPhone and Mac data points heading into the quarter," he writes. "Revenue and EPS were 6% and 23% ahead of consensus, vs. an average beat over the last four years of 6% and 16%. We believe the core question that will drive AAPL shares over the next two years is iPhone's level of success in emerging pre-paid markets. Apple's March quarter results are particularly important as they are evidence that the company's growth story can be successful in these emerging markets. Given Apple's commentary around China growing 5x year-over-year, our confidence that Apple can win with an iPhone in emerging pre-paid markets is greater than ever. In the June quarter, we expect shares to move higher in anticipation of the iPhone 5 launch in October."
  • Peter Misek, Jefferies: He said the company posted "terrific" results. "We continue to recommend being in the stock ahead of the massive iPhone 5 product launch" in September or October, he writes.
  • William Power, Baird: "Dispelling recent concerns, Apple produced another strong quarter, driven by iPhone upside and significant strength from China," he writes. "We would note that FY Q3 and FY Q4 could present challenging iPhone comparisons, though we remain bullish on the medium- and long-term growth opportunities. We do expect iPad shipments to increase sequentially in FY Q3 and are raising our 2012 and 2013 revenue and EPS estimates. Remain buyers and raising our target price from $700 to $740."
  • Walter Piecyk, BTIG: "We expected the launch of the iPhone 4S in China to offset a slowdown in sales in developed markets but China outdid itself, tripling to nearly $8 billion of revenue in Fiscal Q2 and reaching a surprising 20% of Apple’s revenue," Piecyk wrote in a blog post. "China was the primary driver behind the strong iPhone sales that we expected in the quarter.  However, the 2.0 million upside to our demand-driven 33 million iPhone unit estimate was likely a result of a 2.6 million increase in channel inventory. We estimate the channel build delivered 75 cents of the $1.55 of EPS upside in the quarter.  There was also a non-recurring benefit to gross margin that accounted for another 32 cents of that EPS upside."
  • Brian White, Topeka Capital Markets: "With another quarter of big upside from Apple and trading at just 9x (ex-cash) our CY 2013 EPS estimate, combined with our expectations for accelerated momentum over the next year with the iPhone 5, an Apple TV, an 'iPad Mini' and a potential relationship with China Mobile, we believe the stock has meaningful upside potential from current levels."
  • Richard Gardner, Citigroup: "We reiterate a Buy rating and raise our target to $720 [from $700] on the heels of yet another quarter of blow-out iPhone results," he writes. "iPhone shipments of 35.1 million (+88% year-over-year) exceeded our recently revised estimate of 32.0 million thanks to strong global demand and channel inventory restocking. While we continue to see potential for a merely in-line quarter at some point this year ahead of the iPhone 5 transition, valuation is not demanding and we would be aggressive buyers on any potential weakness."

AAPL in late trading rallied $43.53, or 7.8%, to $603.81.