April 20, 2010 / 8:56 PM / 10 years ago

Instant View: Apple blasts past Street targets, Yahoo mixed

SAN FRANCISCO (Reuters) - Apple Inc posted quarterly results that blasted past Wall Street’s expectations, led by strong sales of the iPhone.

Yahoo Inc exceeded Wall Street’s earnings expectations in the first quarter thanks to the sale of some of its assets and its search deal with Microsoft, but the company’s revenue fell a hair short of Wall Street expectations.

Shares of Apple rose more than 6 percent in after-hours trade. Yahoo were down about 2 percent in after-hours trade after an initial rise.


“It was phenomenal. Clearly Apple’s market share gains — on a number of fronts — has continued as consumer spending has somewhat resumed. The interesting thing is how that tracks when we actually get real consumer spending growth. We haven’t gotten that yet. When a real recovery happens, Apple’s growth is going to track well-ahead of its peer group.

“They beat earnings by $1 — so how can anyone say they are highly valued? I would argue that the stock is inexpensive on a growth metrics. and it just got cheaper because we just added a dollar to our model.

“Apple is taking share and they are adding markets they are not in, and they defining new markets. Clearly the economy is the big driver to what’s happening to them. Everything else is noise. Competition is running around in circles — so competition doesn’t really worry me.”


“It’s unbelievable. They totally crushed the quarter. It seems really strong across the board. The iPhone numbers nearly match the Christmas sales numbers. You have to ask whether Christmas has come again for Apple in March. The profit at $3.33 a share beat our $2.50 estimate which was the highest on the Street. Their revenue guidance was less conservative than they usually give. We think the iPad and the MacBook Pro are already stocking out. It’s spectacular, we’re still in the middle of recession and they’re doing these numbers. We believe these results help support the stock at a higher level.”


“It’s somewhat disappointing. A soft quarter relative to expectations on revenue. Search was down 14 pct year over year so they’re continuing to struggle in search and still contracting in a meaningful way. That clearly hasn’t turned at all. The (improving) economy hasn’t helped them in any noticeable way.”

“All and all you could say (results were) fairly neutral but not showing any positive meaningful growth yet and that gets at the compromised competitive position of Yahoo.’


“All around this is just the kind of quarter that we wanted.... In 2010 it’s more of an earnings story, particularly this quarter. It’s the first time we’ve had year over year revenue growth in six quarters. That’s big.

“It’s a return to growth even if it’s 1 percent and you have earnings leverage.”


“We’ll hear on the call where the growth came from on a year-to-year basis. We’re expecting a shortfall on the search (advertising) side. We’ve noticed a huge decrease in spending on their affiliate side, that probably affected the revenue top line a bit — they fell short of consensus a little bit.”

“To get people really excited, they really need to show a lot of growth on the display (advertising) side, because that’s ultimately where their strategy is heading.”

Reporting by Yinka Adegoke, Paul Thomasch, Alexandria Sage and Bill Rigby; editing by Peter Henderson

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