UBS: The Street Got 'A Little Bit Too Excited' For Apple's Q3 Results

The Street isn't reacting well to Apple Inc. (NASDAQ: AAPL)'s third-quarter earnings on Wednesday, even though the company beat earnings and revenue projections in its earnings declaration Tuesday. The only disappointment in Apple's results was perhaps the company missed the 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."

Related Link: Apple Saw The Highest Switchover Rate From Android Ever

He went on, "And remember that at the beginning of the quarter the Street was around 43 million units, they 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."

Image Credit: Public Domain