We wrote yesterday that Apple’s (NASDAQ: AAPL) first-quarter earnings could be a critical fork in the road for the world’s largest tech stock.

It didn’t really take either road.

Apple’s earnings were decidedly mixed, sending the stock on quite a rollercoaster ride since the company reported after hours yesterday.

When the results first started to trickle out, shares rose from their $406 closing price to $415. This morning, however, the stock had dropped back below $400 at 10:14 ET. It’s currently hovering right around the $400 mark.

Investors can’t seem to make up their minds on how they feel about recent Apple earnings. Here are some of the numbers they’re weighing – both good and bad:

The Good

  • The company sold 10 million more iPhones and iPads than it did a year ago – an encouraging sign given the growing competition from rival Samsung.
  • Apple is finally returning some of its massive cash stockpile to its shareholders. The company is planning a series of stock buybacks and dividend increases to return $100 billion in cash to investors by 2015. It will start by increasing the quarterly dividend 15% to $3.05 a share.
  • Apple earnings and revenue both narrowly edged Street expectations. EPS of $10.09 outpaced analyst estimates to $10.07, and revenue of $43.6 billion outperformed the $42.3 billion that was forecast.

The Bad

  • For the first time in a decade, Apple failed to increase its profits. The $9.55 billion in profits was an 18% drop-off from the $11.62 billion the company earned in the first quarter a year ago. It’s telling that, on a per-share basis, the company still managed to beat expectations: the bar has been lowered considerably on Wall Street for the world’s most profitable company.
  • The current quarter isn’t looking much better. Apple lowered its revenue forecast by $2 billion and its gross margins to 36% from 43% in Q2 of 2012. That big a dip in revenue could mean another decline in profitability.
  • Still no word on any new products. Rumors have swirled for months about a new iWatch or an Apple TV, but an unveiling does not seem imminent. Even with iPhone and iPad sales still going strong, Apple could use a new product not only to combat slipping profits, but to remind investors of the innovative powers that helped it become the world’s largest company in the first place.
Published by Wyatt Investment Research at