UBS: The Street Got 'A Little Bit Too Excited' For Apple's Q3 Results, Business Doing 'Awfully Well'

The Street isn't reacting well to Apple Inc. AAPL's third-quarter earnings on Wednesday, even though the company beat earnings and revenue projections in its earnings declaration on Tuesday. The only dissapointment in Apple's results was perhaps the company missed most optimistic projections of iPhone sales.

Steve Milunovich, UBS analyst, was on CNBC recently to discuss the reason for the slump in Apple's stock.

The Street Got Too Excited

"I think, what happened was that Apple just had blown out numbers the previous couple of quarters," Milunovich began. "And, I think, on the Street we got a little bit too excited in terms of what would happen this quarter. It appears Apple actually was surprised by the demand. I think, that's why the inventories were low in the channel."

He went on, "And remember that that at the beginning of the quarter the Street was around 43 million units ended up at 47 to 48. So, from that standpoint I don't think there's anything that's really changed about the business. I just think expectations need to reset a little bit. But, I think, Cook is right, the business is doing awfully well."

No Reason To Worry About China Sales

Milunovich was asked how he sees Apple's sales in China panning out from here on. He replied, "I think, we will probably see continued strength. Obviously it's something we want to watch closely, but revenue more than doubled year-over-year. So, it's actually accelerating and the company is very closely watching traffic in the stores, app store downloads and so forth and apparently at this point they don't see any reason to be concerned."