Goldman Sachs Gives Color On Apple's Stellar Earnings

Apple AAPL reported surprising upside for its December quarter results, and guidance also exceeded expectations. Revenues and EPS of $26.7 billion and $6.43 exceeded Goldman's estimates of $24.7 billion and $5.41. Meanwhile, March quarter guidance for revenues and EPS of $22 billion and $4.90 was far higher than Goldman's estimate for $20.9 billion and $4.49. Goldman reiterates its CL-Buy on Apple and believe the strong December results should underscore the underlying strength in Apple's fundamentals, especially after the news regarding Steve Jobs' planned medical leave. Goldman also notes that gross margins are recovering at a faster than expected pace, iPad demand was far stronger than most expected, and strong iPhone units exceeded our conservative expectations. The key risks to the target include: macro deterioration, increased platform competition, potential legal and regulatory restrictions, and uncertain management succession plans. Goldman has a $450 PT on AAPL AAPL is trading higher at $345.99