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Apple reported record earnings today for the quarter ending December 31. The company had a net profit of $1.6 billion or $1.76/share on $9.6 billion in sales compared to $1 billion profit on $7.1 billion last year. Gross margin rose to 34.7 percent from 31.2 percent last year. Apple sold more than 2.3 million Macs representing 44 percent unit growth year over year. The company also sold 22.1 million iPods and 2.3 million iPhones. The forecast, however, was unsettling: Apple projects earnings of 94 cents a share on $6.8 billion in revenues. While sales grew 35 percent year-over-year in the December quarter, the company's projection for March shows only a 29 percent increase.

Great results for Apple, this quarter at least, soundly beating the street. Analysts polled by Thompson were looking for the company to earn $1.62/share on $9.47 billion in revenue.

Well, not so fast. This quarter is nice, but the market is not happy at all with the low forecast numbers. After shedding more than 3 percent today, AAPL is down big after hours, off almost 10 percent.

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But wait, there's more! Back in October, Apple laid out a conservative prediction for this quarter: "Looking ahead to the first quarter of fiscal 2008, we expect revenue of about $9.2 billion and earnings per diluted share of about $1.42." Apple had $9.6 billion in revenue and EPDS of $1.76/share. A significant jump, especially the profit number. Perhaps all the investors jumping ship at the bad forecast are overreacting?