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Apple (AAPL), the giant maker of personal computers and consumer products, recently accomplished another rare feat, though not the kind that shareholders have come to anticipate. Indeed, the company, now headed by CEO Tim Cook (he took over for the late Steve Jobs), surprised Wall Street by posting weaker-than-expected results for the fourth quarter of fiscal 2011 (ended September 24th). This prompted some nervous investors to turn bearish on the large-cap issue and question whether the tech giant had reached a near-term peak. We are not overly concerned with the earnings miss, however, and would encourage interested parties to take advantage of the current entry point.

True, share net of $7.05 for the September interim came in $0.63 short of our call and $0.25 below the Street's consensus view. But the bottom line still surged more than 50% on a year-over-year basis (against a tough economic backdrop), on a 39% revenue advance. And the earnings softness relative to estimates was largely the result of Apple's transition to its next-generation iPhone. Indeed, this long-awaited product transition, from the iPhone 4 to the iPhone 4S (the 4S model officially went on sale on October 14th), led some savvy customers to delay smartphone purchases/upgrades, and caused overall iPhone sales to come in on the light side. (iPhone shipments for the period amounted to 17.1 million units, versus Wall Street's expectation for closer to 20 million units.)

Everything else about the quarterly performance was pretty impressive, including strong gross margins (component pricing remains favorable), healthy gains by the traditional Mac line, and a hefty 166% jump in iPad unit sales. And the company issued upbeat guidance for the December period, with sales likely to come in at $37 billion and share net at $9.30. This outlook, along with record-setting sales of the iPhone 4S thus far, further suggests that the slowdown in smartphone momentum will be fairly short-lived.

In light of the unusually aggressive guidance from management, we are raising our share-earnings estimate for fiscal 2012 sharply, from $28.30 to $34.00. This would equate to annual bottom-line growth of about 23%, and this showing, if it materializes, should prompt Wall Street's bulls to get back on Apple's bandwagon in droves. We continue to recommend this technology stock as both a short- and long-term holding. It's suitable for most equity accounts, given Apple's stable business and rock-solid finances.

About the Company: Apple Inc. is one of the world's largest makers of personal computers and peripherals and consumer products, such as the iPod digital music player, the iPad tablet, and the iPhone smartphone, for sale primarily to the business, creative, education, government, and consumer markets. It also sells operating systems, utilities, languages, developer tools, and database software. As of September 25, 2010, Apple operated 317 retail outlets, including 233 stores in the United States and 84 overseas.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.