Apple 4Q FY10 results (.34B/.64) were well ahead of Street consensus estimates (.86B / .06) prior to the call.Upside in the quarter was driven by robust iPhone sales and by AAPL’s accelerating momentum overseas and at Apple Stores.Supply constraints impacted both iPad and iPhone sales with supply short of demand for most of 4QFY10, according to Management.Gross Margins declined 220 bp Q/Q mainly as a result of higher contribution from iPhone 4 and iPad, despite easier component pricing and higher volume.

We note Management had guided 36% GM for the quarter which AAPL was able to best by 190 bp.1Q FY11 guidance at B/ .80 was ahead of Street expectations on Revenue reflecting our expectations of strong Holiday demand for the refreshed iPod line, the upcoming Mac refresh, and less constrained supply in the face of strong iPhone4 and iPad demand.Steve Jobs made a surprise appearance on the call to address competitive issues in the tablet and smartphone markets, while articulating AAPL’s competitive advantages.

We are encouraged by Management commentary around increasing adoption of both the iPhone and the iPad in the Enterprise. Near term, we expect the release of iOS 4.2 to increase the adoption rate of the iPad in the enterprise, helped by the “air-cover” being provided by the launch of several competitive Tablet offerings, some of them targeted clearly at the Enterprise.We are also encouraged by ramping revenue and profitability at AAPL stores and their potential especially in overseas markets to meet untapped broad-based demand for AAPL products.

Many are raising  estimates given the faster-than-expected international ramp, the fast-growing AAPL retail footprint especially overseas, increasing Enterprise adoption and future easing of iPad and iPhone4 supply.Ex-cash, AAPL shares trade at about 13x our new FY11 EPS estimate, which given the factors discussed above and AAPL’s growth, are inexpensive,

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