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Apple Reports Strong Second Quarter Results, Shares Jump Higher

Official Apple Inc. Picture of the Apple Store in Beijing China

Apple stated that the company sold 37.4 million iPhones in the quarter, up  2.3 million from the same period last year. iPad sales where strong, with 19.5 million iPads sold, an increase of 6.7 million units from the same quarter last year. 

Tim Cook, Apple's CEO stated:

“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,”

and

“Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline.”

Apple is providing the following guidance for its fiscal 2013 third quarter:

  • revenue between $33.5 billion and $35.5 billion
  • gross margin between 36 percent and 37 percent
  • operating expenses between $3.85 billion and $3.95 billion
  • other income/(expense) of $300 million
  • tax rate of 26%

Shares opened up trading near $420, up from the pre earnings release halt of $406. After initially climbing even higher reaching above $429, shares began to feel the pressure of profit taking and within an hour were trading for just a few dollars above the pre enarnings announcement level. It's been so long since Appple really embrased a bullish bias that many investors likely felt they should cut and run with the small gains received.

Traders may not be impressed (unless they're short), but investors are gaining a great opportunity to pick up increasingly more valuable shares for less and less. Because the stock trades at such a large price, the options are especially attractive for premium writers. Before buying shares, take a long look at the option chains. You can sell in the money put options for a sizeable premium and enter into the stock with a lower (and more likely profitable) cost basis.

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Stock Tickers: AAPL
Apple Inc.
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