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Apple Earnings Review: Sometimes When You Lose, You Really Win

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Apple reported better-than-expected fourth-quarter earnings after the close Monday.

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Apple (NASDAQ:AAPL) may be a market share loser, but with yesterday's fiscal fourth-quarter earnings results, it is officially back on top in the high-end smartphone war.

Let's do a quick rundown of the numbers before we get into the fun stuff:
  • Earnings were $8.26 vs. the Bloomberg consensus of $7.92.
  • Revenues were $37.5 billion, above expectations of $36.8 billion as well as the top end of guidance.
  • iPhone sales were a whopping 33.8 million units vs. Street estimates of about 32 million.
  • iPad sales were 14.1 million units, below expectations of 14.5 million.
  • Gross margins were 37%, at the high end of guidance and in line with expectations.
  • For fiscal Q1, Apple expects revenues of $55-58 billion, the midpoint of which is above expectations of consensus of $55.7 billion. And note, that consensus number was rising, as shown in the charts I posted yesterday.
  • Apple forecast Q1 gross margins of 36.5-37.5%, below the 37.7% that Wall Street had been expecting.

Sometimes When You Lose, You Really Win

Sales of Apple's iPhone units were up 26% year-over-year, and nearly 6% above expectations.

But 26% growth isn't fast enough to gain market share on a global basis. Research firm Strategy Analytics just reported its third-quarter industry numbers, and pegged global unit growth at 45%, with Apple's share falling to 13.4% from 15.6% the year before.

Apple's key rival Samsung (OTCMKTS:SSNLF) is still number one, with 35.2% share, up from 32.9% last year.

But look at this screen grab from Apple's website:



There's still a two- to three-week wait on iPhone 5S orders -- and the short supply impacted Apple's sales in the quarter.

If Apple had hit, say, 35 million units in the quarter, its year-over-year growth would have been 30%; 36 million would have brought it up to 34%.

However, there may be a benefit to pushing some sales out to the December quarter in the name of smoother quarter-to-quarter results, especially since Apple was still able to beat expectations.

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Position in AAPL
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