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Apple Inc. (NASDAQ: AAPL) is expected to report earnings after the close of trading today.  Consensus estimates from Thomson Reuters (First Call) are $1.39 non-GAAP EPS and $9.75 billion in revenues.  Today’s guidance is also likely expected to be viewed far differently than in prior quarters where the company was deemed merely as being conservative.  Unfortunately, Apple may be judged on much more than just its results today.

Consensus estimates for the coming quarter are $1.13 non-GAAP EPS and$8.20 billion in revenues.   We think it will offer guidance for onequarter only, at best.

This entire report will also be held in a new light under the healthsituation of Steve Jobs and over controversy of how the company’s boardof directors either handled that itself or how the board allowed SteveJobs to handle it.  There are now credibility issues which have notbeen present for about the entire decade.

We are still somewhat cautious here since consumers may be less willing to pay premium prices for Apple products.

Options traders appear to be braced for a move of up to $7.00 in eitherdirection, although we would note that there is almost a full month’sworth of time value included in that.

Apple’s chart and valuation are at a precarious point today.  Thecompany still trades at a premium valuation to Dell and H-P of roughly20% depending upon the valuations of today versus those of 2009.  Butits chart has been trying to find a bottom for the last 3-months.Whether that is the case, we’ll know that tomorrow.  With shares justnorth of $80.00 today after a 2% gain, shares are barely above the52-week lows of $78.20.  For whatever it is worth, the after-hours moveafter Steve Jobs stepped down was down as low as $75.00 or $76.00.

Analysts are no longer all cheerleaders.  But the overall bias is stilla positive one. The average target is close to $120.00 from analysts.

Jon C. Ogg
January 21, 2009