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Apple Inc. (NASDAQ:AAPL) and Netflix Inc (NASDAQ:NFLX) both released their earnings reports this afternoon for the quarter ending June 2012. Both firms managed to defy the expectations of Wall Street analysts but in wildly different ways.

Beginning with Netflix, the company posted earnings per share of 11 cents. Analysts had expected to see a profit of just 4 cents per share. The overshoot bodes well for the video streaming service, as it battles new competitors in the sector and seeks to keep its customer base and grow.

This was not truly good news for the company however. Earnings are still down 91% from what they were in the same period last year, and subscriber growth numbers were anything but reassuring. Investors flocked away from the stock in trading after the numbers were announced. In after hours trading the firm’s shares had dropped by over 15%.

Netflix’s decision to increase its prices last year, to the ire of its customers, is still hitting hard into its business, but the company is seeking to shift focus, in a limited way, to television production, rather than just distribution. The high cost of television licensing is biting heavily into the company’s profits.

The company’s projections for subscriber growth did little to comfort investors. Company estimates for this quarter rang true in this report, but traders were hoping for a more dramatic rise in the figures. Netflix revealed that it was planning on expanding its services into a fourth market toward the end of this year.

Netflix has a tough year ahead, and competing services from Inc. (NASDAQ:AMZN), and Google Inc (NASDAQ:GOOG) threaten to make it tougher. The top name in internet television streaming may shed further value before the year is out, as investors worry about the future of the company.

Apple Inc. (NASDAQ:AAPL), despite a healthy quarter in which profits totaled $8.8 billion, is facing doubt from investors, who had expected the company to at least meet the expectations coming from Wall Street. The conference call which followed the report did little to reinvigorate those investors. Apple’s shares were down more than 5% in after market trading.

The blame for the fall in the company’s profits is given mainly to a slow in iPhone sales, due to expectations of the release of a new model in the near future. If this, an expected phenomenon, was the only issue with the firm’s stock, investors would not be running from the shares with such gusto.

China might be slowing down for the company. In today’s release, the company showed that $5.7 billion of its revenue came from China. That is indeed a rise of 48 percent over last year, but In the last quarter, ending in April, that number was $7.39 billion.

A certain amount of that decrease could be blamed on the delayed purchases of the iPhone. That cannot be the full story however. Apple launched its new iPad in China in this quarter, and sales of the iPhone should be increasing overall if the economy is indeed the goldmine the company hopes.

China may be slowing down, and that means bad things for growth in Apple’s product sales. The iPad will continue to increase its reach as it fills an expectant market, the iPhone is dealing with an almost entirely saturated one in Western economies.

Apple’s reliance on those economies for revenue means they will turn to relying on upgrades, rather than new sales in the near future. Sales in Western Europe are already flat. The sales figures in China may take some time to recover.

The hopes of Apple’s investors have been placed in China, and in the release of a new product line. The first of these seems, at least in the short term, to be stymied. The second is still within reach, if the company has something to offer.

Apple is still an undervalued company, despite the highs its share price has soared to. There’s a reason so many hedge funds repeatedly disclose it among their top holdings. There is also a downward pressure on the price, brought about by how far it is from the pack, and the stratospheric expectations placed on it by traders.

When it comes to Apple, it seems that nothing short of exceptional will do for investors. Today’s report was not exceptional. It was disappointing. Investors are not used to being disappointed by news coming from Cupertino. It may take some time for them to recover. In that time, answers should be clearer on the future of the firm’s new products, and Chinese ambitions.

Both Apple and Netflix have stopped short of the hopes of their investors today. Both firms have shown that even in the tech world, or in the divine domain that Apple seems to inhabit, the economy causes problems. The rest of the year will be difficult for both firms as they attempt to bring their investors back into the fold.