All the reports about Apple's disappointing quarterly results - the Wall Street Journal headline read "Apple Loses Some of Its Shine" - serve as a reminder about what really moves markets in the near term. Apple's problems weren't that it had poor sales or revenue in the third quarter. The problem was that it didn't live up to Wall Street's lofty expectations.
Consider that the quarter saw record sales of both Macintosh computers and iPads. The overall revenue for the quarter was $28.3 billion, the second-best quarter on record for Apple. Revenues were up year-over-year by 39 percent. Profits were up by 54 percent. There's nothing wrong with any of that; the issue is that the analysts' consensus expected earnings to be 3 percent higher than they actually were.
As a result, Apple lost 6.5 percent off its share price in after-hours trading on Tuesday following the earnings report. But for long-term investors, missing (or meeting) Wall Street's quarterly expectations should be merely a blip.
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