Analyst: AAPL Q4 Earnings Report a Mixed Bag

| Apple Stock Watch

Apple reported record breaking revenue for its fourth fiscal quarter on Monday, bringing in US$37.5 billion, up from $36 billion a year ago, and climbing iPhone sales. Both are good news for the company and shareholders, but Wells Fargo analyst Maynard Um saw some bad news mixed in, too.

Apple brought in $37.5 billion in Q4, but not all of its news was good.Apple brought in $37.5 billion in Q4, but not all of its news was good.

iPhone sales were up year over year at 33.8 million units from 26.9 million, and iPad sales were slightly up from 14 million to 14.1 million. Earnings, however, were down from $8.2 billion to $7.5 billion, and Mac sales were down slightly from 4.9 million to 4.6 million.

Mr. Um said iPhone demand was strong around the world, as was iPad demand in developing markets and the U.S. educational market. China saw strong iPhone performance even though iPhone 5s supplies were limited, and iTunes revenu climbed 15 percent year over year.

He also noted that Apple retail store sales dipped 3 percent year over year, and that the new higher cost, yet lower priced, iPad and MacBook Pro models will take a hit on company margins.

That said, Apple's declining Mac sales aren't following the rest of the industry. While Macs dipped 7 percent, the overall PC market saw a 10 percent decline.

Despite the potential downsides for Apple in the coming quarters, Mr. Um is still optimistic. "We believe Apple's current product cycles present a strong cyclical opportunity to benefit not only from unit demand but, more importantly, gross margin benefits," he said.

Apple is currently trading at $527.77, down 2.11 (0.40%).

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Quarterly iPhone sales and revenue climbed, and iPad numbers were up, too. Now we're heading into the holiday buying season with new iPhones and iPads, plus updated MacBook Pro models. Even with sales declining in the overall PC market, Apple's Q1 2014 numbers have the potential to break records yet again.

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Would Mac sales be higher if Apple didn’t take so dang long to release the Mac Pro or to rev existing models? Like the Mac Mini, among others?

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