AAPL Q3 ’12

Apple released their Q3 2012 earnings on July 24. The consensus estimate was $10.36 earning per share but the actual EPS was $9.32. In addition, Apple lowered their guidance for fiscal year Q4 due to economic worries stemming out of Europe. The stocks was down about 5% the following day, but was able to regain a couple percents by the end of the week due to optimistic outlook of the Eurozone. The calendar year Q2 is normally slower for Apple due to their product release cycles, notably for the iPhone. A new iPhone model is scheduled for release during summer or fall each year. As a result, consumers delay their purchases in anticipation of the new model.

The stock dropped less than I had imagined. It seems like the investors are unfazed. The current support level looks to be $570 and resistance comes into play at $605. I think  many investors are looking for an excellent Q4 out of Apple with the iPhone 5 release and the continual sales growth of the iPad. With an upcoming smaller and cheaper iPad, Apple is sure to capture even more of the tablet market share.

Do I invest more in Apple at this point? The mid-week dip definitely created a nice buy in opportunity for those who were confident enough to pull the trigger. This year has been shaky with the constant, periodic worries of sovereign debt causing a global economic recession once again. Even though Apple carries a lot of forward momentum, it is still bounded by the rules of economics, which many seem to forget. It’s true that Apple has made an incredible run in the past decade but the past is not an indicator of the future. Q4 ’12 will be a crucial indicator. If Apple misses estimates again, it might signal the peak of the stock, much like Google, which has seen very little movement in their stocks for the past 2 years.

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