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Technology Stocks : Apple Inc.

AAPL 271.86

-1.0%

3:59 PM EST

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To: NAG1 who wrote (148959)	1/23/2013 6:37:00 PM
From: Keith Feral	Read Replies (1) of 213176

I thought Apple did a pretty good job toning down expectations last quarter with 36% GM assumptions. I think 38% is going to be the long term assumption for Apple going forward. That might cause analysts to further reduce their earnings targets for this year or next, til revenue growth begins to outweigh the negative impact from lower margins over the past couple of quarters. The 10% slide AH probably eliminates most of the price risk from the Gross Margin debate. Everyone is going to have to settle for 38% longer term, and forget about 44% margins from a year ago. It doesn't mean they can't back to those levels over time, but it will keep revenue growth from generating YOY earnings growth for a couple more quarters til they get back into the October time frame.

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