Instant view: Apple shocks investors with earns miss

Earlier, chip maker Intel Corp beat Wall Street's third-quarter sales targets, helped by strong demand for computers in China, while Yahoo Inc struggled to revive its online advertising business.

Following is immediate reaction from investors and analysts.

APPLE (AAPL.NQ)/p>

MICHAEL WALKER, PORTFOLIO MANAGER, WP STEWART

"There's no question this was a transition quarter ahead of the 4S (the latest iPhone). But the iPad number was a little interesting because there wasn't a transition there."

"I wouldn't be surprised to see people buying shares because of the holiday season. With the early pace of iPhone 4S sales, my guess is that disappointment is relatively short-lived."

"I'm not going to call Q3 a throwaway quarter for iPhones but it was definitely transition. The Mac sales were strong."

SHAW WU, ANALYST, STERNE AGEE

"The numbers are actually quite good. The reason why the stock is off I think some of the analysts got carried away. We have seen this before. A couple of quarters ago analysts got carried away on the iPad side. They forgot there is a product transition."

"What is interesting is the guidance is less conservative than usual for their next quarter. It's a timing issue where it looks like the business that people thought would be in the September quarter is occurring in the December quarter. One of the things obviously is the iPhone 4S just started shipping a few days ago."

COLIN GILLIS, ANALYST, BGC PARTNERS

"Expectations for this company were red-hot, that is why we downgraded it. Fifty-six brokers out there and everyone is saying 'buy'."

"The reality is their business is not an annuity. They have to sell their quarter's worth of revenue every 90 days. They had a big upgrade cycle with the iPhone, the numbers came in weak. They need to set records every time they report to keep the momentum."

STEPHEN MASSOCCA, FUND MANAGER, WEDBUSH MORGAN

"Apple has done something very unusual. They missed estimates and they are guiding above estimates for the next quarter. This is not what they typically do. They usually exceed estimates and give out easy guidance. We will have to wait and see more on this but the Nasdaq is likely to be impacted by this tomorrow."

INTEL

PATRICK WANG, ANALYST, EVERCORE PARTNERS

"A couple of things they said that were fairly constructive: they delivered a pretty clean beat and raise. They really told us that things weren't as bad as were feared in the third quarter. Fourth quarter guidance is well above consensus estimates, but below seasonality, which makes sense."

"They are giving us a realistic look at the fourth quarter and it seems like they are guiding conservatively, between 2 and 3 percent growth. Growth is historically up about 8 percent."

"Bottom line they delivered a beat and raise. They also authorized another $10 billion in stock buyback. This is in conjunction with the 4 percent dividend yield. Intel has one of the strongest balance sheets in technology and you've got investors happy."

BETSY VAN HEES, ANALYST, WEDBUSH SECURITIES

"We were looking for a beat, but it was above our expectations, and guidance clearly outpaced what we and the Street were looking for. Intel's definitely benefiting from the ramp of new products."

"We remain cautious. While it's exceptional what Intel has been able to put up, we've seen 17 semiconductor companies negatively pre-announce. While Intel's results are fantastic, when you've got 17 other companies that have already struggled it's hard to be constructive, given the uncertain macro."

KEVIN CASSIDY, ANALYST, STIFEL NICOLAUS

"It's just like what the company has been saying, double digit PC unit growth."

"We have all these datacenters out there being built, the companies aren't buying traditional servers from Dell or HP, but they are buying the chips and making their own servers."

"Intel is showing record sales. Their outlook is better than consensus, in this market that is very good."

"The gross margin estimate was better than what we were expecting."

YAHOO

BEN SCHACHTER, MACQUARIE RESEARCH

"It looks OK, nothing spectacular but nothing disastrous, and nothing disastrous is good news for these guys."

"They're keeping their heads down, and just trying to execute. As long as these guys didn't have completely terrible guidance, and they didn't, they should be OK."

COLIN GILLIS, ANALYST, BGC PARTNERS

"The earnings beat is nice, but this is a revenue story, and revenue was still declining."

"What I really want to see is that they can stop the declining revenue. If we got a little revenue beat, that would be really nice. You can always squeeze more out of earnings.

HERMAN LEUNG, ANALYST, SUSQUEHANNA FINANCIAL GROUP

"The display stuff was a little bit weaker than expected, but search was a little bit better. Overall it was a cost savings story. Costs at the bottom line were a little better."

"The guidance was a little worse on the top and bottom line. That's largely expected given the abrupt firing of (former CEO) Carol Bartz."

"What's going to predicate the stock movement going forward is going to be the commentary on the call, whether it's under strategic review or Yahoo Japan. About 90 percent of the focus for investors on the call will be that kind of thing."

(Reporting by Liana Baker, Angela Moon and Jennifer Saba in New York, Braden Reddall and Sarah McBride in San Francisco)

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