The Morning Brief: Apple’s Profit Falls

Shares of Apple fell between 3 percent and 4 percent in after hours trading even though it seemed to report pretty good numbers for the most recent quarter. Earnings easily beat estimates while revenue was a little better than the forecast. Shipments of iPhones beat estimates, while shipments of iPads came in slightly below expectations. The stock initially dropped around 3 percent before rebounding during the subsequent conference call. UBS Monday morning raised its price target for Apple, from $520 to $540 per share, ahead of the earnings report. The investment bank told clients in a note that its forecast was above the consensus for the September and December quarters. “Apple goes into its strongest two quarters with a refreshed product line-up,” the report stated. It added that its estimate for iPhone sales “could be low” while its forecast for iPad sales is “aggressive.” The stock closed the regular session at $529.88.

Shares of Herbalife, the multi-level marketer of nutritional products, fell slightly after initially jumping more than 3 percent after it reported quarterly earnings that beat the consensus forecast by more than 20 percent. It also raised its full-year earnings forecast and named former Surgeon General Dr. Richard Carmona as an independent director. The stock rose about 2.34 percent in the regular trading session.

Wayne Yu, who heads up event-driven investments at Société Générale in New York, is leaving the firm to launch his own hedge fund, Condorcet Global Opportunity Fund. The French banking giant is reportedly investing $250 million in the fund, which is expected to begin operations in the first quarter of 2014. The fund will trade stocks of companies undergoing some sort of change, such as a merger or restructuring.

Stephen Mandel, Jr.’s Lone Pine Capital disclosed it owns 25 million shares of Gap, or 5.4 percent of the total outstanding. At the end of the second quarter, the Greenwich, Connecticut hedge fund firm did not own any shares of the retailer. The filing was made with a Form 13G, which means the investment is passive.

CNBC is reporting another one of its “SAC Capital close to settling” stories. Are they closer than they were last week when they were “close to settling” and even closer than two weeks ago when they were “close to settling?” Do we have a settling scale, like the Richter Scale? I am going to ignore these reports until the Justice Department makes its announcement.