Apple and IBM

by Larry Levin

AAPL blew away the earnings/share estimates: $4.64 vs. $4.10. However, sales of the iPad were disappointing. AAPL is down roughly 8% as I write this Monday afternoon.

Earnings breakdown

* Q4 revenue USD 20.34bln vs. Exp. USD 18.90bln
* Q4 iPhone units sold 14.1mln, up 91% vs. Exp. 11.7mln
* Q4 gross margin 36.9%
* Q4 iPod units sold 9.05mln, down 11%
* Q4 iPads units sold 4.19mln vs. Exp. 4.81mln
* Q4 operating income USD 5.45bln
* Q4 gross profit USD 7.51bl;n
* Q4 operating expenses USD 2.07bln
* Q4 net USD 4.31bln
* Q4 Mac units sold 3.89mln
* sees Q1 EPS USD 4.80 vs. Exp. USD 5.03
* sees Q1 revenue USD 23bln vs. Exp. USD 22.34bln

IBM isn't faring much better this afternoon. Services signings, a large share of IBM's revenue, fell 7% to $11 billion in the third quarter, IBM said today in a statement. Like AAPL, the company posted earnings and sales for the period that exceeded analysts’ estimates but is getting slammed as I write this; IBM is down 4%.

Previous Day's Trading Room Results:
Trade Date: 10/18/10
E-Mini S&P Trades*
(before fees and commissions):

1) Engf sell @ 9:33am at 1176.25 = +1.00 (1)

2) Pivot Sell @ 2:10pm at 1181.75 = +0.50 & +0.75 (2 lot)

3) Algorithm positions (2)

4) “Reading the Tape” positions (2) combined Secret’s, Algo, & “Reading the Tape” total… +4.25

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