Though overall revenue came in at $17.43 billion, up 35% from the same quarter a year-ago, the company’s actual profits declined by a whopping 58% to $177 million. All told, Amazon reported earnings of $0.38 a share, almost double the Wall St. consensus of $0.17. Last year, however, Amazon recorded net income of $416 million and EPS of $0.91.

Interestingly, the company didn’t disclose any specific Kindle Fire sales figures, though a recent report from a research company claims that Amazon thus far has sold upwards of 6 million Kindle Fire units. Now if that’s anywhere close to being true, you’d think that Amazon would be touting those figures. Perhaps its possible that Amazon just doesn’t want to set a yardstick for Kindle Fire sales prematurely.

As for Amazon’s steep drop in profits, note that Amazon reportedly loses a small bit of money on each Kindle Fire it sells. In turn, Amazon is hoping to pick up the monetary slack via sales of its Amazon Prime service.

Still, Amazon did mention that Kindle sales, in the aggregate, tripled during the holiday shopping season.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” Amazon CEO Jeff Bezos explained in a press release. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”

For the entire fiscal 2011 year, Amazon reported net sales of $48.08 billion, an increase of 41% from the same quarter a year-ago.

Amazon also noted the following highlights from the quarter:

During the nine-week holiday period ending December 31, 2011, Kindle unit sales, including both the Kindle Fire and e-reader devices, increased 177% over the same period last year.

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago.

Amazon launched Kindle Stores at Amazon.it and Amazon.es. Kindle moved to the top of the bestseller list on launch day in both countries and held the top spot this holiday season. The new Kindle was also the bestselling product on Amazon.co.uk, Amazon.de and Amazon.fr.

Amazon, more than any other company, is uniquely positioned to give Apple’s iPad a real fight. Not only can Amazon leverage the popularity of the Amazon.com homepage to drive sales, it has a vast sea of media content at its disposal. From books and movies to music and apps, Amazon can distribute media to consumers directly whereas other tablet manufacturers are at the mercy of Android.

As we’ve explained before, the Kindle Fire, more so than any other tablet, is best positioned to compete with the iPad – though that may say more about the rest of the Android playing field than about the Kindle Fire itself.

In any event, the Kindle Fire has undoubtedly sold well, but with scathing reviews from critics, some have openly questioned what the return rate on the Kindle Fire is and if it has enough legs to maintain its sales momentum now that the initial burst of enthusiasm that accompanies a brand new product launch has passed.

Earlier today, Apple released its earnings results from the quarter gone by and the results are astonishing.

Record breaking iPhone sales. Record breaking revenue. And last but not least, record breaking earnings. Hell, record breaking everything.

All told, Apple, during the last three months of 2012 posted revenue of $46.33 billion and a quarterly profit of $13.06 billion. Earnings came in at $13.87, well above Wall Street estimates. During the same quarter a year-ago, Apple reported revenue of $26.74 billion and a quarterly profit of $6 billion with an EPS of $6.43. The consensus on Wall Street came in at $10.08 per share on anticipated revenue of $38.85 billion;

That’s right folks, a company with the second largest market cap on the planet was able, in just a span of 12 months, to double, DOUBLE, it’s earnings. For a company as large as Apple, that’s absolutely unprecedented.

Leading the charge, as you might expect, was the iPhone. During the quarter gone by, Apple sold 37.04 million iPhones, completely obliterating even the most bullish of Wall St. projections while setting a new iPhone quarter sales record in the process. Year over year iPhone growth came in at 128%.

But the iPhone wasn’t the only device to see a huge uptick in sales. Apple last quarter sold 15.43 million iPads, a 111% increase from the same quarter a year-ago and yet another all-time sales record. The previous iPad sales record was 11.12 million.

What’s more, Mac sales did better than expected with Apple recording 5.2 million Macs sold, a 26% increase from the same quarter a year-ago. And guess what, folks, Mac sales during the December also set a quarterly sales record.

The only device that saw a decline in sales, as you might expect, was the iPod. Apple sold 15.4 million iPods during the quarter gone by, representing a 21% decline from the same quarter a year-ago. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” Tim Cook explained in Apple’s press release. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

MacStories has put up some illustrative charts depicting Apple’s epic growth over the past few years. Check it out here.

Lastly, you don’t want to put too much weight into after-hours trading, but last we checked, shares of AAPL were trading at $454.

Wowsers.

The Wall Street Journal reports that the first quarter of a new year is the most common time for stock options to vest and that Tim Cook, more than any other Silicon Valley executive, stands to gain the most over the next few weeks.

Of all the Silicon Valley executives who have a vesting event scheduled for the first quarter of 2012, the one who stands to reap the most is Apple Inc. Chief Executive Tim Cook, the study found.

Mr. Cook has portions of two restricted-stock-unit grants—including one he received for filling in for Steve Jobs when the co-founder was on medical leave—vesting in the first quarter. As of Apple’s closing stock price on Dec 30, those vesting shares of Mr. Cook’s were worth $96.2 million, according to the study.

Second on the list was Google Inc. Executive Chairman Eric Schmidt, who has pieces of two equity awards vesting in the first quarter. As of Dec. 30, those were valued at around $16.4 million.

Indeed, Cook seems to be swimming in stock options. Following Steve Jobs’ resignation and Cook’s ascension to the CEO position, Apple filed a form 8-K with the SEC which noted that the Board of Directors awarded C00k 1 million restricted shares of Apple, half of which vest on August 24, 2016 and the other half which vests on August 24, 2021. Naturally, the aforementioned options are contingent upon Cook staying with Apple.

Related: Tim Cook begins to put his mark on Apple

And for the first time in company history, Samsung’s total number of mobile phone sales surpassed 300 million units.

“The mobile business is generating a huge chunk of profit now,” James Song, a Seoul-based analyst at Daewoo Securities Co., said by telephone. “It may be getting harder for Apple to catch up because they only have a limited number of models.”

Catch up?

If anything, Samsung is the one playing catchup to Apple, copying their hardware and software design with no regard for Apple’s IP and attempting to make easy money off of the hard work of others.

And still, it’s Apple that controls the lion’s share of profits in the mobile space. Even with record mobile handset sales, Samsung still can’t match the mobile revenue Apple rakes in every quarter. And, they’re accomplishing this with a limited product line.

Indeed, many months ago we highlighted how Apple’s success is the result of their streamlined product line, not something they’ve achieved in spite of it.

Going back to Samsung for a minute, it’s also worth noting that their record breaking quarter was also influenced by a one-time gain resulting from the sale of its hard disk drive business to Seagate for $1.38 billion.

via Bloomberg

Commenting on the matter, Andy Zaky a few weeks ago penned a thoughtful article highlighting the many reasons why Apple is the most “undervalued and underappreciated large-cap growth company in America.”

When it comes to the stock market, it’s not so much a game of “how much money are you making now” as it is a question of “how much money will you be making in the future?” This dynamic explains why shares of Microsoft have been languishing over the past 5 years; even though revenues have recently set all-time records, investors remain wary of Microsoft’s ability to grow at an appreciable rate.

But Apple is a different story entirely. Save for the last quarter, Apple has continuously smashed Wall St. expectations every single quarter over the past few years. And what makes Apple’s earnings rise all the more impressive is that it’s revenue is already substantial. Put simply, increasing earnings by 45% when you make $28 billion a quarter is profoundly more challenging compared to a company with quarterly revenue of $350,000. Nonetheless, Apple’s revenue growth the past few years has surpassed the expectations of even the most bullish of analysts.

And yet, Apple’s amazing growth seems to be wholly ignored by business pundits who seemingly place more faith in mysteriously sourced rumors in Digitimes than they do in cold hard numbers. In Apple’s most recent quarter, the company reported a growth rate of 121.94%, its highest growth rate in over 6 years.

“Yet, one would never know this by listening to CNBC, Bloomberg or reading the average article from The Street.com or Business Insider”, Zaky points out. “Instead, the only stories you will see are ones that don’t really matter in the grand scheme of things.”

For example, CNBC likes to trout out Apple’s declining iPod sales, even though that segment of Apple’s business only contributes 4% to Apple’s bottom line. Yet that somehow supersedes the news that Apple’s iPhone sales are growing much faster than the overall smartphone market. Indeed, business pundits have a decidedly pessimistic outlook on all things Apple, so much so that even when Apple products are absolutely destroying a market, these bozos are quick to point out that Apple’s products are bound to tumble eventually.

There’s an unfortunate and constant kernel of hypocrisy that anyone who closely follows shares of Apple is undoubtedly familiar with. For years, investors were quick to put a damper on Apple’s prospects citing the company’s need to find new revenue streams outside of the iPod. But Apple was able to do just this with the iPhone and subsequently the iPad. Yet for some ungodly reason, the pundits at CNBC now decide to harp on iPod sales that, as Zaky points out, don’t play a significant role in Apple’s quarterly earnings anymore. At the very least, you’d think that they’d be smart enough to focus on more pressing issues that make them seem at least marginally aware of the topics they’re covering. And sadly, these are the very same talking heads America listens to these days for financial advice.

We’ve also seen a similar dynamic in the way analysts and business pundits view and interpret the pricing of Apple products. If Apple’s pricepoints are high, analysts are quick to claim that Apple needs to lower its pricing as to gain a foothold in a particular market. If Apple’s pricepoints are low, analysts are quick to question if Apple’s margins will be large enough to really have a significant impact on their bottom line.

Unfortunately, many of the financial gurus tasked with covering Apple look at the company through a lens that obfuscates what really matters – that Apple makes a shit ton of money every quarter and is poised to grow its earnings at a rate that is unprecedented for a company as large as it.

In late 2007, Apple traded at $200 a share after reporting $3.93 in EPS on $24.5 billion in revenue. Turn the pages to 2011 and it’s an entirely different company. In just four years, Apple’s earnings have grown 600% to $27.68, and its revenue skyrocketed 341% to $108.2 billion. That’s the most explosive 4-year growth rate of any large-cap company on the entire S&P 500.

Yet, one wouldn’t know this given the stock’s very sluggish performance, extremely depressed valuation and the media’s permanently negative sentiment on the stock over the past few years. The stock is now trading at an extremely low 13.1 trailing P/E ratio. We’re talking about a valuation level that Apple hasn’t seen in nearly a decade – this despite the fact that the company grew its earnings 82% this year which is the highest in over 7 years. We’re talking about a valuation that is more than 10% lower than the lowest point during the financial crisis.

Zaky next points out that while Apple has increased its earnings by 600% in just 4 years, Apple shares have only increased by 81%.

So maybe all of Wall Street is asleep at the wheel and every company is undervalued.

Not exactly.

The P/E ratios of companies like eBay and Amazon are all higher than Apple’s. And this in spite of the fact that Apple’s recent growth is the highest in company history. Earnings are on the rise, and with a huge ceiling for growth, one can only scratch their head at the buffoonery that drapes the less than nimble minds of Wall Street who can’t see the true value of Apple.

Apple is now trading at the S&P 500 average valuation of 13x despite growing its earnings at a pace that is higher than the top 100 S&P 500 stocks and higher than 90% of the stock listed on the index. By pricing Apple at $363, the market is saying that Apple is worth no more than the average stock. 66% revenue growth and 82% earnings growth isn’t valued at all. Neither is Apple’s $100 billion cash (including fiscal Q1 2012) nor its entire balance sheet for that matter. In fact, Apple is now valued below the average stock trading on the NASDAQ-100 which suggests that the market believes that it is better to hold the NASDAQ-100 (QQQ) than it is to hold Apple from a valuation perspective.

The point of all this, Zaky says, is to illustrate the extent to which share of Apple are undervalued. Consequently, Zaky asserts that the market’s blindness to the reality of Apple’s financials can’t go on indefinitely and that Apple’s inexplicable period of P/E compression will come to an “abrupt end.” After all, Zaky points out, if we assume an even mild growth rate for Apple of 50%, the stock will have to rise substantially just to maintain its shockingly low P/E ratio – to around $577. And if Apple’s P/E ratio should actually rise to appropriate levels, well, then Apple investors might be dancing in the streets.

Put simply, Apple has nowhere to go but up.

While some attribute this to an inherent anti-Apple bias in the markets, or perhaps yet another example of the buffoons on Wall St. being, well buffoons, some have recently taken to arguing that Apple needs to pay out a dividend to investors.

Now of course, many of the pro-dividend proponents simply want Apple to pay back its investors because it has an excess on cash on hand. And to that end, you might recall that Apple under Steve Jobs was always dividend-averse. During a 2010 shareholder meeting, for example, Jobs explained that Apple prefers to keep its cash hoard to itself so that it can make bold purchases when opportunities arise.

“We know if we need to acquire something – a piece of the puzzle to make something big and bold – we can write a check for it and not borrow a lot of money and put our whole company at risk,” Jobs explained. “The cash in the bank gives us tremendous security and flexibility.”

But another reason for Apple to pay out a dividend, some argue, is that Apple limits itself as a stock to the extent that a number of large investment funds are precluded from buying Apple shares precisely because the company doesn’t pay a dividend.

Tiernan Ray of Barrons wrote recently:

The other side of the coin, less well understood, is that value investors, who should be buying this stock night and day, are “underweight” Apple. Among the largest U.S. value funds, the stock is just 0.4% of assets, vastly smaller than the 2.5% average for all funds.

Apple has both exhausted its shareholder base among its natural fans, the growth guys, and also failed to charm the other folks in the room, the value guys.

And the value guys actually make up vastly more of the world’s assets under management.

The problem seems to be one that Apple shares with only a couple of other companies. It is huge, it is sitting on an enormous pile of cash, and it refuses to buy back shares or pay a dividend. That is an approach that irks value investors, Sacconaghi observes.

The single most important factoid in Sacconaghi’s note is the fact that Apple is one of only three of the top 25 companies in the Standard & Poor’s 500 Index, along with Google and Warren Buffett’s Berkshire Hathaway (BRKA), that don’t pay a dividend.

Now Google and Bershire Hathaway? Now that’s some solid company right there.

That said, an interesting report emerged on Monday claiming that Apple may issue a significant dividend sometime in early 2012.

In an interview on Bloomberg TV yesterday, Gamco Investors Inc. money manager Howard Ward said that Apple “could easily be a 3 percent dividend-yielding stock or even higher.”

Notably, you might remember that in Apple’s most recent earnings conference call, newly minted CEO Tim Cook explained that Apple wasn’t religiously tied to holding onto its cash hoard solely for the sake of holding onto it.

Those receiving 150,000 shares include Bruce Sewell, Jeff Williams, Phil Schiller, Peter Oppenheimer, Bob Mansfield, Scott Forstall. 50% of these shares will vest on June 21, 2013 with the other 50% set to vest on March 21, 2016.

“Our executive team is incredibly talented and they are all dedicated to Apple’s continued success,” said Apple spokesman Steve Dowling in a statement. “These stock grants are meant to reward them down the road for their hard work in helping to keep Apple the most innovative company in the world.”

Though Cue’s bonus is less than the others, it’s his second major bonus in the past few months. Cue was awarded 100,000 restricted stock units when he was promoted to SVP status at the beginning of September to oversee Apple’s iTunes Store, iCloud, iAd, and iBookstore. Cue, who is a 22-year Apple veteran, helped create the company’s first online store in 1998, and Apple’s iTunes Music Store in 2003–the latter being the business that would become the foundation for the App Store and iBookstore, places where Apple sells other digital goods.

CNET

Apple’s cash on hand now checks in at $81 billion dollars. That’s insanely high and will only further encourage shareholders to clamor for either a dividend of a stock buyback. Apple of course is pretty conservative with its cash holdings. It doesn’t go out and buy companies half-heartedly and hasn’t issued a dividend in quite a few years.

Apple’s ever increasing cash hoard was touched upon briefly during Apple’s earnings conference call yesterday. When asked if Apple was pursuing a different investment strategy vis-a-vis its cash holdings, Apple CEO Tim Cook responded.

We want to maintain flexibility. I think everyone who knows us knows that the cash isn’t burning a hole in our pocket. We don’t want to do silly things, and will continue to invest conservatively. We’ve done a very good job in an extremely difficult market and have done things in Apple’s best interest. We acquired several companies, acquired intellectual property, invested in supply chain and invested in new stores. What we’re doing with cash, the cash we do spend, we’re doing an extremely good job and are very frugal.

And while no one can dispute Apple’s frugality, Apple went on a relative spending spree this past quarter. They opened up a number of high profile and expensive stores overseas, and more than that, they put down a lot of money to acquire intellectual property.

Back in July, Apple was part of a consortium (along with RIM, Sony and Microsoft) that put up a $4.5 billion winning bid for over 6,000 Nortel patents. Apple allegedly contributed $2 billion of its own money to the final tally and also received outright ownership of Nortel’s 4G patents.

Cook continued,

I’m not religious about holding or not holding cash. I’m religious about other things, but not that. We will continually ask ourselves what’s in Apple’s best interest and always do what is in Apple’s best interest. It’s a topic for the board on an ongoing basis and we will continue to discuss it. Of the little more than $81 billion in cash, a bit more than 2/3rds of it was offshore.

Following that, an analyst followed up and asked if Apple was reluctant to initiate a stock buyback because it might indicate that Apple’s ability to innovate is sloping downward. Indeed, we’ve covered before the well-accepted tenet that companies that initiate buybacks, and to a lesser extent those that issue dividends, often don’t know what to do with their cash holdings which is why they resort to the two aforementioned options.

Cook, however, promptly squashed that notion.

“I think that anyone looking at us and our track record would not come to any conclusion that we’re waving a white flag on innovation,” Cook said. “We’ve had a series of unbelievable products, the best products of the world according to our customers. We’ve got a pipeline that’s unbelievable.”

You can accuse Apple of many things, but failure to innovate isn’t one of them.

Still, Apple, in typical fashion, said that the perception that accompanies a stock buyback wouldn’t prevent it from buying back its shares if that was deemed to be in the company’s best interest.

Wall St. analysts would be well-advised to take their Apple earnings estimates and just tack on a little bit extra. Without fail, Apple over the past few years has demolished Wall St. expectations and this quarter was just as impressive though Apple did fail for the first time in a long time to meet Wall Street’s consensus this quarter. Still, profits year over year are up an astounding 53.6%.

A short while ago, Apple released its financial results for the September quarter (ending on Sept. 24) and posted revenue of $28.27 billion and a quarterly profit of $6.62 billion, up from revenue of $20.34 billion and a profit of $4.31 billion in the same quarter a year-ago. All told, Apple this quarter raked in earnings at $7.05/share, up from $4.64 per diluted share during the same quarter last year.

Product wise, Apple sold 17.07 million iPhones, 11.12 million iPads, 4.89 million Macs and 6.2 million iPads. Year-over-year iPhone growth came in at 21% while iPad and Mac growth checked in at 166% and 26% respectively.

“We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion,” Tim Cook said in Apple’s press release. “Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.”

Apple’s earnings this past quarter represent the company’s highest September quarter – both in terms of revenue and overall earnings – in company history. Notably, international sales accounted for 63% of Apple’s revenue.

For Apple’s entire 2011 fiscal year, they posted revenue of $108.25 billion and a profit of $25.92 billion for EPS of $27.68. During the previous fiscal year, Apple posted revenue of $65.23 billion, profits of $14.01 billion and EPS of $15.15. Note that this is the first time Apple’s yearly revenue has ever topped $100 billion.

Comically, and highlighting the stupidity of investors and Wall Street morons, Apple’s stock is down over $26 points in after-hours trading. Sell on the news, I suppose.

via Apple

The iPhone 4S is on track to be the most successful iPhone to date. Yesterday, AT&T said that the iPhone 4S saw more launch-day activations than any other iPhone in history. Sprint meanwhile said that the iPhone, in just 12 hours, had already become its most successful product launch in company history. Taken together, Wall St. was impressed and shares of Apple skyrocketed up $13.57 to close at all all-time high of $422.