Posted January 29, 2013 9:50

This past Wednesday, Apple reported their earning report for fiscal Q1 2013. In their report, Apple reported record earnings. But on the flip side, Apple failed to beat estimates on a number of fronts. The only data point that Apple managed to beat on was the earnings per share (EPS). They slightly missed on revenue, iPhones, iPad and guidance.

Shares fell over 11% the following day. But what does this earning report tell us? It tells us that Apple had major supply issues throughout the quarter. In the conference call, Apple CFO Peter Oppenheimer specifically pointed out that they sold “every iPad mini they could sell”. What this tells me is that they had the demand and if they could have averted the supply issues, this would have been a blowout quarter.

In my opinion, investors weren’t so upset with the small miss in iPhones or iPads but what was the main disappointing factor, the big miss on forward guidance. Apple always guides below the street and that is a well know fact, but in this report CEO Tim Cook and CFO Peter Oppenheimer stated that they weren’t going to sandbag their guidance anymore. They are going to give a respectable viewpoint of what they actually think will happen. By them saying that, it indicated that the upcoming quarter would also have its share of problems with supply issues and gross margins.

Looking ahead, Apple looks to have its fair share of problems, and if you just went back three months, Apple was the most loved stock on the street. No one could own enough shares, whereas now, Apple has become one of the most hated names as the stock has endured a 30% sell-off. Time will tell whether or not Apple could get its act together. Future products will tell the tale of Apple as future iPhones and iPads have been rumored to come out during mid-summer.

Apple’s main competition is Samsung, and if Apple can’t come up with future products that dazzle the eye and satisfy investors that they are still the greatest innovators in the smartphone and tablet market, then Apple’s best days could be behind it and the bears might actually be in control for a prolonged period of time and able to drive this stock a lot lower.