Like everything in 2011, earnings season has been one of extremes. Strong
reports are rocketing stocks higher, and any hint of poor earnings is sending
investors packing. Take Apple Inc. (NASDAQ: AAPL ) for example: Apple announced
that its earnings results came in below analysts' expectations, the first such
miss since 2004. Revenue for the company came in at $28.3 billion, and the
company posted $7.05 earnings per share representing a 3.9% and 3.2% miss,
respectively. However, it's important to keep in mind that these results
represent 39% revenue growth and 54% earnings growth year-over-year. That's
solid growth for a large-cap company, and gross margin remains high at 40.3%
compared with 36.9% last year. The big reason why Apple posted this miss is
because they are a victim of their own success. Customers held off on purchasing
iPhones this quarter due to rumors that the company would be introducing a newer
version in October. Of course that is exactly what happened, and Apple announced
first day pre-orders exceeded 1 million units and exceeded the previous record
of 600,000. In total, they sold over 4 million of the new units in the first
three days. This represents more than double the 1.7 million sold by Apple last
year during the introduction of the iPhone 4. And, considering that Apple sold
17 million iPhones in the last quarter, the company is well on its way for more
blowout top- and bottom-line growth. This is why the stock was not punished on
the earnings miss and will quickly approach 52-week high levels. And I highly
recommend that you take advantage of this short-term dip and pick up shares of
AAPL under $420. The company is a screaming buy at current prices.
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