A company issues its quarterly report. Its earnings are solid, but lower than what analysts expected. So a bunch of people sell the stock and its price takes a beating.

It’s a familiar story and one that was played out today ^[1]: Apple announced earnings of $7.02 per share yesterday. That looks great compared to last year’s $4.64 per share, but not so great compared to the average $7.29 analysts had predicted.

It was the first time since 2004 that Apple failed to meet analysts expectations. And in a predictable reaction, the stock price took a hit, down well over 5 percent to just under $400 late Wednesday afternoon (while Apple stores remained closed so employees could virtually attend Steve Jobs’ funeral).

Were investors right to back off Apple? With the brilliance of 20-20 hindsight, the analysts who had predicted higher earnings all pointed to one highly pertinent fact: The iPhone 4S hit stores October 14–just after the close of the quarter. Not surprisingly, iPhone sales flagged in July, August, and September while customers waited for the new phone to appear. And the new phone’s sales–a record 4 million in its first weekend–seem to confirm that there was pent-up demand.

That’s good news for Apple’s share price, analysts note, with some giving target share prices for Apple of $530 or more. In fact, they say, now with the price down, might be just the time to buy.

Seems like sound logic to us.

Read more at CNET ^[1] and Wyatt Investment Research ^[2].