Watch how a stock reacts to the news, not the news itself: this is an old trader's saying. Apple shares are displaying some resilient strength this morning following an earnings report that was interpreted both positively and negatively last night.
This may be a sign that people got too negative on the stock as Apple shares plunged from $700 to $400. It's now bounced back to near $540, with shares are up $7 to $537 ahead of trading this morning.
This trend now has the potential to feed on itself, as overly negative analysts are forced to revise their forecasts upwards, as is starting to happen this morning. Several analyst firms including Goldman Sachs and Cowen & Co. have alluded to this in their research notes.
Apple reported profits that beat analyst estimates by about .30 cents per share, though some anlaysts and investors griped that it's projecting flattish profits for its upcoming holiday quarter. In the pre-market hours, however, Apple's stock is strong following a sprinkling of analyst upgrades.
The Cupertino, Calif.-based purveyor of all things "i" reported posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per share. These results compare to revenue of $36 billion and net profit of $8.2 billion, or $8.67 per diluted share, in the year-ago quarter. Gross margin was 37 percent compared to 40 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue.