Apple Stomps Estimates Again - Analyst Blog

Apple Inc. (AAPL) has done it again -- posted highly impressive earnings results that left the Zacks Consensus Estimates in the dust and its own guidance purely laughable. Apple Inc. generated $6.43 per share in its fiscal 1st quarter 2011 on revenues of $26.7 billion. The Zacks Consensus Estimates had been $5.38 per share and $24.3 billion in revenues. Apple's own forecast had been $4.80 and $23 billion, respectively.

This will salve a lot of investors feeling the burn of an initial $20 drop in AAPL's share price following CEO Steve Jobs' announcement that he will be once again taking medical leave from the company he founded and later resurrected. While not managing the day-to-day activities at Apple Inc., Jobs is still expected to be included in major strategic decisions for the company.

As it is turning out, well over half of the 2.25% share price loss in Tuesday trading before the bell has been made up in the after-market, following AAPL's stellar results.

Analyst estimate revisions broke through in a big way to the upside a week ago when Apple and Verizon announced that iPhones would be available to Verizon (VZ) subscribers as of February 10th. This solidified what had long been expected regarding iPhone branching out from its exclusive deal with AT&T (T). Verizon, the nation's leading wireless carrier, offers tremendous new exposure for the iPhone starting February 3rd, when customers will be able to pre-order their new iPhones.

Eleven of the 19 analysts who upwardly revised estimates in the past month have done so within the last 7 days, largely based on the Verizon deal. In addition, over the past month, 25 estimate upgrades were issued by analysts for the March quarter and 26 for fiscal 2011.
 
Even still, in the face of this swarm of upward estimate revisions, Apple Inc. has still posted a 19.5% positive earnings surprise for the quarter. This is the largest for the company since its 76.4% surprise a year ago.

Looking forward -- aside from weighty questions regarding Steve Jobs' health -- Apple Inc. has issued March quarter guidance of $22 billion and $4.90 per share. The Zacks Consensus Estimates prior to AAPL's guidance had been $20.7 billion and $4.31 per share, but something tells us Apple Inc. might still be low-balling this a bit...
 
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