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Apple's beat and 7:1 split: What the analysts are saying

April 24, 2014: 1:50 AM ET

What are they are not telling their clients is that they missed a chance to make some money.

Screen Shot 2014-04-24 at 7.36.07 AMFORTUNE -- If the small army of analysts who track Apple (AAPL) are embarrassed by their failure -- across the board -- to alert clients that Apple was about beat the Street's consensus and announce a 7-for-1 split, and that its shares might pop better than 8% in after-hours trading, you wouldn't know it from their post-earnings notes.

"Many analysts," Carl Icahn tweeted after the numbers were released, "fail to understand company."

Below: Excerpts from the reports that arrived overnight. More as they come in.

Katy Huberty, Morgen Stanley: Stronger iPhone and User Growth Tees Up 2H14 Product Cycle. "We are buyers of the stock in light of low institutional ownership, stronger-than-expected iPhone sales, and upcoming product cycles not baked into consensus estimates... iPhone shipments of nearly 44M were above consensus of 38M and in line with the strength indicated by our AlphaWise Smartphone Tracker during the quarter. iPhone growth improved in a number of geographies, including double-digit growth in the US, 50% in Japan, and 28% in China. Improved mix drove gross margin to 39.3%, above guidance of 37-38%. Better-than-expected June guidance is in line with our prior model and straddles consensus at the high-end." Rating: Overweight. Price target: $630

Gene Munster, Piper Jaffray: First take: iPhone A Positive Surprise As Focus Remains On New Products. "Overall we view the significant upside to iPhone in the March quarter as a sign that the iPhone business is healthier than we and the Street previously expected, but note that the iPad business appears to be facing challenges. In terms of June, Apple guided slightly higher than we had expected, but given the reality that the Street will go to the high-end of guidance, we would view the guide as in-line with what the Street was already expecting. Overall we view the guide as a positive indicating the business is holding together with aging products." Overweight. $640.

Brian Marshall, ISI: Larger Screen iPhone is Desired by All... "The Mar-14 quarter reminded investors of the power of AAPL's franchise (e.g., near double-digit underlying growth, etc.). We believe new product category introductions in the 2H can help further restore/enhance the brand and ecosystem while an iPhone (~60% of gross profits) refresh invigorates sales/EPS growth... While we view the current lack of a ~5.0" iPhone as AAPL's largest product "misstep" in recent years, we believe the "stickiness" of the ecosystem is as strong as ever. In our view, a large form-factor iPhone in 2H will spark a massive upgrade cycle (i.e., "mother lode") in the ~280mil install base as well as the return of some former iPhone users from the Android platform. Strong buy. $600. 

Brian White, Cantor Fitzgerald: Our Initial Thoughts on Apple's 2Q:FY14 Results. "Apple reported 2Q:FY14 iPhone unit sales of 43.72 million that handily beat our estimate of 36.0 million, while iPad units of 16.35 million units missed our 18.0 million projection. Mac unit sales came in at 4.14 million units vs. our 4.1 million projection... In our view, more important than tonight's results is the rollout of the iPhone 6 and entry into a new product category with the iWatch that we anticipate in the second-half of the year." Buy. $777.

Peter Misek, Jefferies: First thoughts on FQ2. "iPhones were much stronger than expected but CQ2 guidance is worse as some iPhones we expected for CQ2 were pulled forward. Demand is clearly there and now with the feared June guidance out of the way it is possible to be aggressively buying the shares ahead of what we believe will be a successful iPhone 6 launch." Buy. $625.

More to come.

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