The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.
Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
This is a very good point. Especially given the fact that, arguably, this is the most competitive segment in which Apple operates (Macs, iPads, iPods, and OS are really pretty much segments of their own).
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
Winston Smith sat at his desk in the Records Department of the Ministry of Truth.
A rolled newspaper article appeared in the slot by his desk. He removed the paper from the hole and carefully unwrapped the article and gazed at the headline and accompaining text.
UPDATE 5-Apple blames iPhone rumors for disappointing results
Rare disappointment, shares dive
CFO blames rumors of new iPhone, customers wait
He thought for a moment and then crossed out the text with a thick black pencil again and again. He picked up the microphone and pressed the button on the machine and said in a slow precise tone.
"Apple profits jump 54% on record sales of 4.9M Macs, 11.2M iPads"
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
Next time expectations will be lower, I presume, which will help reset expectations which will lead up to another blowout quarter.
Then go back and edit your first reaction. You can do that, you know. (Just returning the cheap sarcasm there).
What's the actual subject that you're discussing? That Apple missed EPS expectations? Did you miss what I said before?
No thanks. I take it you are amazed and shocked to discover that the markets are built on expectations. Perhaps you missed everything I've said about that.
Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.
I really do live in cave. How did you guess? Fortunately I have electric lights and wifi.
I remember when what you say was true. I'm guessing you wouldn't claim it still is if you had those memories yourself. I hate to break it to you, but it might just be possible for other companies to compete with Apple.
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.
Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.
Yes, they are precisely that. If you can't even beat the conservative street consensus for earnings, then that is spelled B-A-D, and it doesn't matter if the company is Apple or GE or Intel or anybody else.
The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?
You're missing one point. Apple's guidance was $25 M in revenues and $5 EPS. They told the Street that it would be a slow quarter. So they actually beat their revenue guidance by 10% and EPS by 40%. It's not their fault that analysts are idiots.
Furthermore, with Apple's track record, it's ridiculous to panic over one quarter - especially when Apple said it would be slow and had reasons for it. At that point, you're no longer an analyst or investor, you're a day trader.
Anybody look to analyst for investment advice shouldn't be allowed to buy stocks in the first place. Talk about being gullible in the presence of con men.
You can't read too much in to one quarter's results, it's not a long enough time to even out the effect of special events. Maybe there were more Mac sales because people had been waiting for Lion, and fewer iPhone sales because people were waiting for the 4S?
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
Oracle puts all its faith into databases.
Microsoft puts all its faith into office.
Google puts all its faith into a search engine.
They seem to be doing quite alright with themselves.
You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.
Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.
His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
It turns out that Apple beat its guidance by roughly the same amount over every quarter for the past 2 years. The most recent quarter was not an exception. What happened is that the analysts were grossly out of line in their projections based on previous history.
Really what stinks here? IPad sales up 166%, Mac sales up or the general revenue improvements over last year. I really don't get the negativity.
They were under the street's EPS. First time in about ten years. Hours before the earnings announcement I posted here that if Apple fails to beat the street by at least 10% then the stock will fall. They didn't, and it did. It's not about negativity, it's about what happens.
Quote:
Originally Posted by wizard69
The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?
That "I" am so reliant on? Try investors. Try the markets. Chalking it up to "manipulation" is just another way of saying that you don't understand how markets work. Investing in stocks is about trying to anticipate the future. I didn't hear any complaints when Apple rallied to new highs on these profit estimates. Why it surprises anyone that the stock retreats when they don't come true is an everlasting mystery to me. I'm actually surprised that it wasn't by a lot more.
Comments
The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.
Exxon-Mobil is a pipsqueak in comparison.
Apple, its shareholders and customers are in good hands.
Tim's clearly worth his salary and then some.
Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
This is a very good point. Especially given the fact that, arguably, this is the most competitive segment in which Apple operates (Macs, iPads, iPods, and OS are really pretty much segments of their own).
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
A rolled newspaper article appeared in the slot by his desk. He removed the paper from the hole and carefully unwrapped the article and gazed at the headline and accompaining text.
UPDATE 5-Apple blames iPhone rumors for disappointing results
Rare disappointment, shares dive
CFO blames rumors of new iPhone, customers wait
He thought for a moment and then crossed out the text with a thick black pencil again and again. He picked up the microphone and pressed the button on the machine and said in a slow precise tone.
"Apple profits jump 54% on record sales of 4.9M Macs, 11.2M iPads"
I think there were two problems:
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
Next time expectations will be lower, I presume, which will help reset expectations which will lead up to another blowout quarter.
love how the headline ignores the big miss (first in 4 years) in expected EPS and iPhone sales.
If I thought you actually were interested in investing in anything, I'd explain the differences between analysts' estimates and company guidance.
Go back to your mommy's basement, now.
BTW - after hours sales as the price dropped = 7+ million shares.
Then go back and edit your first reaction. You can do that, you know. (Just returning the cheap sarcasm there).
What's the actual subject that you're discussing? That Apple missed EPS expectations? Did you miss what I said before?
No thanks. I take it you are amazed and shocked to discover that the markets are built on expectations. Perhaps you missed everything I've said about that.
Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.
I really do live in cave. How did you guess? Fortunately I have electric lights and wifi.
I remember when what you say was true. I'm guessing you wouldn't claim it still is if you had those memories yourself. I hate to break it to you, but it might just be possible for other companies to compete with Apple.
I think there were two problems:
Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.
Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.
If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.
Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.
You can't sugarcoat this no matter how much you try. It stinks.
Really what stinks here? IPad sales up 166%, Mac sales up or the general revenue improvements over last year. I really don't get the negativity.
Yes, they are precisely that. If you can't even beat the conservative street consensus for earnings, then that is spelled B-A-D, and it doesn't matter if the company is Apple or GE or Intel or anybody else.
The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?
You're missing one point. Apple's guidance was $25 M in revenues and $5 EPS. They told the Street that it would be a slow quarter. So they actually beat their revenue guidance by 10% and EPS by 40%. It's not their fault that analysts are idiots.
Furthermore, with Apple's track record, it's ridiculous to panic over one quarter - especially when Apple said it would be slow and had reasons for it. At that point, you're no longer an analyst or investor, you're a day trader.
Anybody look to analyst for investment advice shouldn't be allowed to buy stocks in the first place. Talk about being gullible in the presence of con men.
It is going to get a lot uglier without Steve and more competitive iPhone nowhere near for around a year.
How is the 4S not competitive? Its got the same or better specs than the competition and fantastic operating software. Seems very competitive to me.
The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.
Oracle puts all its faith into databases.
Microsoft puts all its faith into office.
Google puts all its faith into a search engine.
They seem to be doing quite alright with themselves.
You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.
Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.
His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.
In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.
Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
This article is a great explanation:
http://tech.fortune.cnn.com/2011/10/...esn?t-matter/
It turns out that Apple beat its guidance by roughly the same amount over every quarter for the past 2 years. The most recent quarter was not an exception. What happened is that the analysts were grossly out of line in their projections based on previous history.
Really what stinks here? IPad sales up 166%, Mac sales up or the general revenue improvements over last year. I really don't get the negativity.
They were under the street's EPS. First time in about ten years. Hours before the earnings announcement I posted here that if Apple fails to beat the street by at least 10% then the stock will fall. They didn't, and it did. It's not about negativity, it's about what happens.
The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?
That "I" am so reliant on? Try investors. Try the markets. Chalking it up to "manipulation" is just another way of saying that you don't understand how markets work. Investing in stocks is about trying to anticipate the future. I didn't hear any complaints when Apple rallied to new highs on these profit estimates. Why it surprises anyone that the stock retreats when they don't come true is an everlasting mystery to me. I'm actually surprised that it wasn't by a lot more.