Actual: $7.47 EPS & $35.3 Bil Rev
Estimated: $7.32 EPS & $35 Bil Rev
Impressive, right? At first glance, there's reason for the bulls to cheer, but dig a little deeper and the picture may not be as rosy. While Apple beat on both the top and the bottom line, the year over year revenue essentially was flat and the earnings were significantly lower than last year. Apple reported earnings of $8.8 billion in Q3 2012 (EPS of $9.32) on revenue of $35 billion. Long term value investors will be swayed by this data as earnings growth is the key driver to nearly any successful fundamental strategy. The difference is that analysts had already lowered their estimates during the course of the previous year. As a result, the main question for future projections is whether Apple will grow faster (or less slowly) than they have in recent quarters, especially given the more competitive technology space. If the answer is yes and Apple continues to innovate with new products, which is something the company has failed to do under the guidance of Tim Cook, then higher share prices will be sure to follow. Otherwise, stagnant earnings growth and flat to lower stock prices could become the norm. This is still Apple, but the company has it's work cut out for itself.
From an Ichimoku cloud technical perspective, here are the levels of support and resistance that will be in play when the market reopens for business tomorrow. Despite having a bearish setup with price, tenkan, kijun, and chikou below the cloud as well a bearish kumo future, the positive earnings news should push prices near the cloud high. Based on post market activity this evening, look for a test of the cloud high at 439.5. If buyers step in the next level of resistance is the swing high at 457. Otherwise, the higher probability is for prices to fluctuate in the middle of the cloud.
Swing high 2: 466
Swing high 1: 457.75
Cloud high: 439.5
Cloud low: 425.25
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