Apple stock tanks over 11% in after-hours trading
Shares of Apple Computer plummeted nearly $6 in after hours trading on Tuesday, losing over 11% of their value despite the company reporting the best quarterly results in its history.
For its fourth fiscal quarter of 2005, the Mac and iPod maker posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. These results compare to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter.
However, the results still fell short of the extremely high investor expectations that have been baked into the company's stock price, which has recently traded at all-time highs.
As of 5:00pm eastern time, Apple stock was trading at $45.85, down $5.74 or some 11.13%.
For its fourth fiscal quarter of 2005, the Mac and iPod maker posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. These results compare to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter.
However, the results still fell short of the extremely high investor expectations that have been baked into the company's stock price, which has recently traded at all-time highs.
As of 5:00pm eastern time, Apple stock was trading at $45.85, down $5.74 or some 11.13%.
Comments
Originally posted by audiopollution
Buy.
My thoughts exactly, they did beat expectations but just not enough. Just your typical overreaction from analysts. Tomorrows event should be big, which is why it's tomorrow and wasn't at Paris.
My interpretation is that the profit was great, but that the volume of sales was less than anticipated.
ButwhatdoIknow
Originally posted by AppleInsider
Shares of Apple Computer plummeted nearly $6 in after hours trading on Tuesday, losing over 11% of their value despite the company reporting the best quarterly results in its history.
For its forth fiscal quarter of 2005, the Mac and iPod maker posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. These results compare to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter.
However, the results still fell short of the extremely high investor expectations that have been baked into the company's stock price, which has recently traded at all-time highs.
As of 5:00pm eastern time, Apple stock was trading at $45.85, down $5.74 or some 11.13%.
[ View this article at AppleInsider.com ]
I've held Apple stock for just over eight years and this pattern is nothing new. You get a run up before the earnings announcement, Apple meets or beats the projections and the price plummets. Clearly, there are market manipulators that drive this behavior. These are not true Apple investors, these are just greedy bastards that care only about money and not how slimily they make it.
Anyone who has put their money into the stock of Apple Computer, Inc. because they think it is a good investment should be thrilled by the news. Apple is on the right track and our investments in the company continue to be wise.
Originally posted by Silverlode
The market is psycho.
No, the market has been critical of Apple for a long time (and rightfully so, I might add) for not lowering their margins and using some of those profits to drive revenues.
With $430M coming in for the quarter, to not be advertising the Mac line is troubling. The reason is that anyone who knows anything knows that there's no Mac advertising because Apple doesn't feel that the Mac is a marketable product - there's really nothing sufficiently good they can say about it to drive sales.
So, they sit on their thumbs until the Intel Macs come out when a better opportunity for marketing shows up and stash away the money as fast as they can. But the long-term health of the company ultimately comes down to using your profits for SOMETHING that will benefit the investor. That might be a dividend if you have no other idea what to spend the money on, or acquisitions to expand revenues or secure a market segment, or investing in new product development or just slashing margins to make your prices more appealing to consumers. But sitting on a huge pile of cash when you have no debt is a weak sign to investors.
Originally posted by johnsonwax
[BSo, they sit on their thumbs until the Intel Macs come out when a better opportunity for marketing shows up and stash away the money as fast as they can. But the long-term health of the company ultimately comes down to using your profits for SOMETHING that will benefit the investor. That might be a dividend if you have no other idea what to spend the money on, or acquisitions to expand revenues or secure a market segment, or investing in new product development or just slashing margins to make your prices more appealing to consumers. But sitting on a huge pile of cash when you have no debt is a weak sign to investors. [/B]
I expect that we'll hear about a new Apple acquisition in the near future ... and ...
Buy.
at 51.19. Then the announcement of Apple's best quarter ever which I think
is great news, & now I hear there was a friggin' 11% slide in after-hours
trading! Fate & timing keep screwing with me. When the iMac first came out I
wanted to buy but I was a broke college student. I was going to buy Apple
stock when it was at $14 but then my car up & dies on me. So instead of putting
ten grand in stock I put a downpayment on a car. That ten grand would
be worth something like $100,000+ today. To this day... I curse my old car for
falling apart.
Don't worry.
Originally posted by sammick
The earnings exceeded the expectaions, but the revenues were below what was expected.
My interpretation is that the profit was great, but that the volume of sales was less than anticipated.
ButwhatdoIknow
not "buy high, and hope for higher" That's what suckers do.
Originally posted by mello
This just pisses me off. I finally have some money to invest so I buy 136 shares
at 51.19. Then the announcement of Apple's best quarter ever which I think
is great news, & now I hear there was a friggin' 11% slide in after-hours
trading! Fate & timing keep screwing with me. When the iMac first came out I
wanted to buy but I was a broke college student. I was going to buy Apple
stock when it was at $14 but then my car up & dies on me. So instead of putting
ten grand in stock I put a downpayment on a car. That ten grand would
be worth something like $100,000+ today. To this day... I curse my old car for
falling apart.
I'm not too concerned myself however, as I've already made a handy profit on my shares. I purchased them in '97 at the adjusted rate of $3.75 per share.
If Apple's stock price was at 60 or higher, I probably wouldn't have bought it.
I'm in now & it's for the long term so hopefully they'll sell a s**tload of iPods
& Mactels when those come out.
Originally posted by johnsonwax
or just slashing margins to make your prices more appealing to consumers.
Would it work? I haven't kept track, but last I looked, it seemed that the only two major computer makers making decent profits were Dell and Apple, the rest were in trouble. To make it worth cutting margins, they'd have to have resonable expectation that they can make more back in volume, i.e., to make it worth cutting the margins in half, sales would need to more than double, and I don't think that would happen. If the margin on a computer was 10%, I don't see how dropping a $1000 computer to $950 would double sales.
I do agree that the current Apple line-up really isn't that compelling, and they are taking steps to fix that by getting more suitable chip line, particularly to get away from the shackles of G4 laptops.
Originally posted by webmail
I don't mean to be a jerk? But why IN THE HELL would you buy Apple stock? Anybody who spent 2 minutes learning how to invest would know better. Since my brain wants to explode I'll just tell you the stupid version "Buy low, sell high"
not "buy high, and hope for higher" That's what suckers do.
Buy low sell high works great for cyclical stocks, but that's not Apple. This is a momentum stock right now. So long as revenues and earnings keep climbing, that P/E will cycle down instead of the share price and *that* becomes a more useful trigger. They have a trailing P/E of 43 and forward P/E of 30, which looks like it'll fall to 28 even without a share price fall. If we fall to $46 as the after-hours suggests, that drops to 25-26 which is pretty good for a growth tech stock.
For a stock that has tripled in the last year, there is no 'low'. You might have a bit of a retracing, but you need to look at other thing to determine if the stock is cheap or not.
Originally posted by JeffDM
Would it work? I haven't kept track, but last I looked, it seemed that the only two major computer makers making decent profits were Dell and Apple, the rest were in trouble. To make it worth cutting margins, they'd have to have resonable expectation that they can make more back in volume, i.e., to make it worth cutting the margins in half, sales would need to more than double, and I don't think that would happen. If the margin on a computer was 10%, I don't see how dropping a $1000 computer to $950 would double sales.
I do agree that the current Apple line-up really isn't that compelling, and they are taking steps to fix that by getting more suitable chip line, particularly to get away from the shackles of G4 laptops.
Well, that's really my point. Cutting margins won't help. Apple knows they won't help. The street knows it won't help. That means that there is something more fundamentally unattractive about the Mac than just the price, and it's something that apparently Apple doesn't belive marketing can overcome.
The real question to ask is, what is so wrong with the Mac that $1.5B per year can't fix? Apple owns the portable music and online music markets, so they pretty much have to invent new customers and let that space mature, but the Mac market is mature. The customers are out there to the tune of 25x-50x what Apple is attracting. Why can't $1.5B get them to show up? The answer is that quarter after quarter Apple has demonstrated through their actions that they're largely unable to turn Mac sales short of selling iPods and waiting. That's their long-term strategy. That sucks. I expect that Intel Macs will change this, but until then...
But for short-termers, I suspect tomorrow will go some way towards recovering from the post-results slump that always happens.
Originally posted by macFanDave
Clearly, there are market manipulators that drive this behavior. These are not true Apple investors, these are just greedy bastards that care only about money and not how slimily they make it.
Well, that pretty much describes the stock market as a whole. Personally I think the opening up of after-hours trading has done more harm than good. Also, with the popularity of online trading came a lot of snap decisions. Things sure have changed over the past decade or so.
Originally posted by nagromme
In the short term, the stock market is basically gambling. I prefer to invest long-term.
But for short-termers, I suspect tomorrow will go some way towards recovering from the post-results slump that always happens.
It would have been nice if I had purchased that stock tomorrow morning
instead of today.