Apple Inc. (NASDAQ: AAPL) had a strange day ahead of earnings due to the Bloomberg TV news that Apple and music labels were going to launch a free ad-supported internet radio service in 2013. Now we know the earnings.

The consumer electronics darling reported earnings of $8.67 EPS and $35.966 billion in revenue. Thomson Reuters was looking for a consensus of $8.75 EPS and $35.8 billion in revenue. Apple said that gross margin was 40.0% compared to 40.3 percent in the year-ago quarter and it said that international sales accounted for 60% of the quarter’s revenue.

Apple guided the current quarter to earnings of about $11.75 EPS and $52 billion in revenue. Thomson Reuters has a consensus of $15.41 EPS and $54.98 billion in revenue.

If you tally up the cash, cash equivalents, short-term securities, and long-term securities, then Apple has more than $121 billion in liquidity sitting in its vaults. Here are the unit sales:

• 26.9 million iPhones in the quarter, representing 58% unit growth over the year-ago quarter.
• 14.0 million iPads during the quarter, a 26% unit increase over the year-ago quarter.
• 4.9 million Macs during the quarter, a 1% unit increase over the year-ago quarter.
• 5.3 million iPods, a 19% unit decline from the year-ago quarter.

Apple shares stock was weak ahead of earnings with a 1.2% drop today to $609.50. Shares have not yet traded in the after-hours session since the stock was halted right before the release.

Investors have to decide whether or not Tim Cook can get away with the perpetual strategy of Steve Jobs by underpromising and overdelivering.

JON C. OGG

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