Apple Earnings: Outstanding Achievement in the Field of Excellence

Apple reported one of the most spectacular earnings report in recent history. Here's what you need to know.

Yesterday after the close, Apple (AAPL) dropped one of the most spectacular quarterly earnings reports seen in recent history, blowing even the most optimistic expectations out of the water.

In the hours heading into the report, I opined that Apple needed to report blockbuster numbers to get the stock moving again, given how widely it's owned and how much it's loved. (See: Apple: Don't Let the Cheap Valuation Fool You, It Has to Smash Estimates Today)

Well, Apple delivered in spades. Earnings came in at $13.87 per share, beating the consensus forecast of $10.08 per share by a ridiculous 38%. Revenues rose an insane $73% to $46.3 billion, crushing expectations by $7 billion.

IPhone unit sales were a just-plain-ridiculous 37 million. Remember, iPhone sales estimates rose steadily throughout the quarter, with the Street expecting 30-32 million -- and Apple still killed it. iPad sales, a sticking point last quarter, also beat expectations with 15.4 million units moved.

And you know what else -- Mac sales absolutely stunning, up 26% during a quarter in which the PC industry actually contracted. (See: This Is the Bad News Microsoft Was Telegraphing)

Apple also now has $98 billion in cash on its balance sheet, giving it unlimited financial flexibility.

But now that we have the facts out of the away, let's get down to the real business -- the takeaways:

1. Apple's amazing momentum is why you never see critics of the company's products, or bears on the stock, actually going short.

2. Apple is a megagrowth safe haven. An awful lot of tech companies had it rough in the fourth quarter -- including PC/smartphone supply chain members NVIDIA (NVDA), Intel (INTC), HTC, and Motorola (MMI) -- but Apple didn't skip a beat.

3. The eurozone economic crisis is not at all a problem for Apple, as it saw 55% revenue growth in Europe.

4. Apple is turning into a China story, as CEO Tim Cook reported staggering demand for the iPhone there, which makes sense given the chaos that occurred when Chinese shoppers couldn't get their iPhones (see: Irate Customers Pelt Beijing Apple Store with Eggs After Failing to Get iPhone 4S).

5. Apple's numbers are probably strong enough to beat back latent anxiety over the company's ability to succeed without Steve Jobs.

6. Siri, which was laughed at for its lack of reliability and its occasional screwiness, was the single greatest piece of stealth marketing of 2012. Why? Because it gave people excuses to show off their iPhones!

Now, as far as actual trading action goes, frankly, I'm surprised Apple isn't over $500 today, but that's probably a function of how widely owned the stock already is. Going forward, it will in all likelihood be one of the best performing stocks in the Nasdaq (^IXIC) this year, because it's basically a mega-growth safe haven trading at a dirt-cheap valuation, and again, it dominated in a tough quarter for the tech space.

In addition, we are already seeing, and will likely continue to see outperformance in key Apple suppliers like Qualcomm (QCOM), Broadcom (BRCM), Nuance Communications (NUAN), and Triquint (TQNT). The best way to play Apple is to just buy Apple, but these names are the key ancillary plays on the company's global domination of consumer electronics.

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