Apple stock drops over 10% in after-hours trading during Q1 earnings call

Posted:
in AAPL Investors edited January 2014
Despite posting a profit of more than $13 billion on record first quarter revenue of $54.5 billion, shares of Apple bled more than 10% of their value in after-hour trading on Wednesday as investors -- spooked by a hard miss on Mac sales and lack of earnings growth -- ran for cover.

AAPL
Source: Google


The precipitous decline followed a positive day of trading, and saw shares slowly shed roughly $50 of their value as chief executive Tim Cook spoke during Apple's ensuing conference call. As of press time, shares were trading down 9.83% to $463.49.

While Apple surpassed expectations on revenues of $54.5 billion, the company missed consensus estimates for Mac unit sales by almost a million units, or 20 percent. It also reported 47.8 million iPhone sales, a couple million less than analysts had been expecting.

In total, skittish investors shaved $50 billion in market capitalization from Apple, a figure that equates to the total market capitalization of several other prominent tech companies. As of press time, Apple's market cap is sitting at roughly $474 billion.

Adding to investors' worries was Apple Chief Financial Officer Peter Oppenheimer's announcement that future guidance would be modified to a more realistic model, a departure from past guidance considered by some to be overly conservative.

When asked about how the new guidance would be presented, Oppenheimer said an earnings range will take the place of Apple's traditional "single point estimate" of guidance that reflected a specific number. The new protocol will likely do away with huge earnings estimate beats.

"This quarter and going forward, we're going to provide a range of guidance that we believe we are likely to report within," Oppenheimer said. "No guarantees -- forecasting is difficult -- but we believe that we will report within that range."
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Comments

  • Reply 1 of 148
    jakebjakeb Posts: 559member
    UGH.
  • Reply 2 of 148
    ifailifail Posts: 463member


    I'm sure analysts will be clamoring for Apple to pump out that cheap iPhone now to move more volume wise than focusing on the fact they still  made more money...

  • Reply 3 of 148


    I really hope this keeps going so:


     


    -stupid expectations disappear


    -Apple goes private.


     


    Meanwhile they will make billions after billions, while making the best products ever. At the end of the day, that's all I care... Products.

  • Reply 4 of 148
    ash471ash471 Posts: 705member


    After hours trading is very light.  I think we'll see the stock come back most if not all of that 10%.  I think Wall Street knew revenue would be light, which is why the stock has been pummeled for the last few months.


     


    I think what is really going on here is people that bought the iphone 4S can't upgrade for free until 18 months or more.  The device isn't enough better to justify paying full price.  I think Apple will continue to sell throughout the year as people's contracts are renewed.  I don't think people are leaving Apple for other devices.


     


    The mac and ipad lineups will take off again when Apple switches to IGZO displays and produces higher resolution with better power usage and thinner devices.


     


    This train has plenty of steam to keep going.  Wait for 9 more months.  

  • Reply 5 of 148
    ash471ash471 Posts: 705member

    Quote:

    Originally Posted by pedromartins View Post


    I really hope this keeps going so:


     


    -stupid expectations disappear


    -Apple goes private.


     


    Meanwhile they will make billions after billions, while making the best products ever. At the end of the day, that's all I care... Products.



    Apple can't go private.  The market cap is way too high.  Who could possibly afford to buy it?

  • Reply 6 of 148
    apple ][apple ][ Posts: 9,233member

    Quote:

    Originally Posted by ash471 View Post


    After hours trading is very light. 



    Not exactly.


     


    It usually is light, but not today. Almost 9 million, last I checked.

  • Reply 7 of 148
    lkrupplkrupp Posts: 9,991member
    Consistent double digit growth and investors think the company is toast. Let's hope Cook and Ives don't cave in to analyst demands they make a dash for the bottom of the barrel. I don't even want to think about a $199.00 POS iPad or iPhone. If I want cheap crap I'll buy a Samsung phone running Android.
  • Reply 8 of 148


    when CNBC give the so called genius -  Jeffrey Gundlach a mega-phone to preach doom & gloom and pending tutti fruity coloured iphones,  it scares people sadly.

  • Reply 9 of 148
    lkrupplkrupp Posts: 9,991member

    Quote:

    Originally Posted by ash471 View Post


    Apple can't go private.  The market cap is way too high.  Who could possibly afford to buy it?



     


    If the stock keeps going down they could buy themselves with the cash they have. Get the stock down to $200 and it could be done.

  • Reply 10 of 148
    ash471ash471 Posts: 705member

    Quote:

    Originally Posted by ifail View Post


    I'm sure analysts will be clamoring for Apple to pump out that cheap iPhone now to move more volume wise than focusing on the fact they still  made more money...



    Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market.  I think what we are seeing is saturation of the iPhone in its target market.  Everyone that has the money to buy an iPhone has bought one.  If Apple refuses to expand its market, it will stop growing.  Apple may be fine with that, but many investors have a problem with it.


     


    I don't think anyone really knows what Apple should do about its high priced high margin iPhone.  Do you risk compressing margins further by releasing an inferior device?  They may take market share, but make less money.  In the long term will they become irrelevant because they will price themselves out of the market?  It is a really tough call.  Call it either way and you'll have a 50:50 chance of being right.


     


    Personally, I'm looking for growth in iPad and Mac.  The iPad actually competes fairly well on price.  The iPad is also more important from the standpoint of a software platform.  I think Apple will benefit from Microsoft causing additional fragmenting of this market.  iPad should continue to reign supreme. I'm confident Apple will also continue to advance this space with better screens and processors, better battery life, and smaller form factor.   

  • Reply 11 of 148
    slurpyslurpy Posts: 5,352member


    Makes sense, since Apple lost money this quarter and their sales dropped. 


     


    Oh wait, they made $54,000,000,000 in revenue and sold 75,000,000 iOS devices (ie. premium products in their class) in a record quarter. 


     


    On second thought, it's Apple, so yeah of course it dropped. 

  • Reply 12 of 148
    Apple needs to ramp up innovation as barriers of entry for smartphones/tablets have been breached... the tipping point has begun.
  • Reply 13 of 148
    rogifanrogifan Posts: 10,669member
    slurpy wrote: »
    Makes sense, since Apple lost money this quarter and their sales dropped. 

    Oh wait, they made $54,000,000,000 in revenue and sold 75,000,000 iOS devices (ie. premium products in their class) in a record quarter. 

    On second thought, it's Apple, so yeah of course it dropped. 
    Just wait until Amazon reports. We'll get a net loss and the stock will jump 10% the next day. :lol:
  • Reply 14 of 148
    ash471ash471 Posts: 705member

    Quote:

    Originally Posted by lkrupp View Post


     


    If the stock keeps going down they could buy themselves with the cash they have. Get the stock down to $200 and it could be done.



    LOL ....I can't wait for that news headline::::::::::::Apple announces it will NOT be building a low cost iPhone and the stock plummets so low that Apple buys itself out with cash on hand.


     


    The knuckleheads on Wall Street might actually be that stupid.


     


    Although, Apple could never buy all its shares, because I'm not selling mine. 

  • Reply 15 of 148
    apple ][apple ][ Posts: 9,233member

    Quote:

    Originally Posted by Slurpy View Post


    Makes sense, since Apple lost money this quarter and their sales dropped. 


     


    Oh wait, they made $54,000,000,000 in revenue and sold 75,000,000 iOS devices in a record quarter. 


     


    On second thought, it's Apple, so yeah of course it dropped. 



    I agree with you, but it doesn't matter what we think. What matters is how the retards interpret the results. I've been doing better with my stock decisions ever since I started thinking like a retard.

  • Reply 16 of 148
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by ash471 View Post


    LOL ....I can't wait for that news headline::::::::::::Apple announces it will NOT be building a low cost iPhone and the stock plummets so low that Apple buys itself out with cash on hand.


     


    The knuckleheads on Wall Street might actually be that stupid.


     


    Although, Apple could never buy all its shares, because I'm not selling mine. 





    That's not really entirely up to you. But there's nothing to worry about.

  • Reply 17 of 148
    red oakred oak Posts: 934member
    The article mixed up Revenue and Profit. There is enough shit going on today - please get the basics right
  • Reply 18 of 148
    jason98jason98 Posts: 766member

    Quote:

    Originally Posted by Rogifan View Post





    Just wait until Amazon reports. We'll get a net loss and the stock will jump 10% the next day. image


     


    Wall Street obviously believes that the days of making money on hardware will soon be over. They want to see a recurrent revenue model (this is why they LOVE Google and especially Amazon with 1300+ PE ratio ).  Maybe they are right but they are betting on it too soon I think. In the mean time Apple should think how to spend their billions to turn the ecosystem into a money making business.

  • Reply 19 of 148
    rogifanrogifan Posts: 10,669member
    Okay the stock has been down now for several months. Wouldn't today's results and guidance already be priced into the stock? I mean what came out of the earnings call that was really unexpected and would warrant a 10% drop?
  • Reply 20 of 148
    rogifanrogifan Posts: 10,669member
    jason98 wrote: »
    Wall Street obviously believes that the days of making money on hardware will soon be over. They want to see a recurrent revenue model (this is why they LOVE Google and especially Amazon with 1300+ PE ratio ).  Maybe they are right but they are betting on it too soon I think. In the mean time Apple should think how to spend their billions to turn the ecosystem into a money making business.
    Who says their right? Why would Microsoft get into the hardware business if its a dying model?

    Oh and Wall Street loves Samsung. Aren't they a hardware business?
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