Apple stock tanks over 11% in after-hours trading

Posted:
in General Discussion edited January 2014
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%.

«1

Comments

  • Reply 1 of 37
    solsunsolsun Posts: 763member
    "One more thing?" Hmmm.. Looks like they timed this perfectly.
  • Reply 2 of 37
    Buy.
  • Reply 3 of 37
    placeboplacebo Posts: 5,767member
    "It's too valuable, oh no!"
  • Reply 4 of 37
    Quote:

    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.
  • Reply 5 of 37
    The market is psycho.
  • Reply 6 of 37
    sammicksammick Posts: 416member
    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
  • Reply 7 of 37
    Quote:

    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.
  • Reply 8 of 37
    Quote:

    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.
  • Reply 9 of 37
    Quote:

    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.
  • Reply 10 of 37
    mellomello Posts: 555member
    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.



  • Reply 11 of 37
    webmailwebmail Posts: 639member
    Generall drops like this are not reported, as they are fairly common after earning reports. Why would the stock you ask when performance is high? Because, often people are banking on the fact that this high level of success cannot continue. The market "is banking" on the fact that this might be "as good as it gets"



    Don't worry.



    Quote:

    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




  • Reply 12 of 37
    webmailwebmail Posts: 639member
    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.







    Quote:

    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.







  • Reply 13 of 37
    xoolxool Posts: 2,460member
    While I'm concerned about the drop, I too see this as an opportunity for other investors to buy.



    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. I guess technically I can't say I've made a profit yet as I haven't sold any shares, but I think I'm doing very well.
  • Reply 14 of 37
    mellomello Posts: 555member
    I just got this money recently. If I had it earlier, I would have bought earlier.

    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.
  • Reply 15 of 37
    jeffdmjeffdm Posts: 12,951member
    Quote:

    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.
  • Reply 16 of 37
    Quote:

    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.
  • Reply 17 of 37
    Quote:

    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...
  • Reply 18 of 37
    nagrommenagromme Posts: 2,834member
    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.
  • Reply 19 of 37
    19841984 Posts: 955member
    Quote:

    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.
  • Reply 20 of 37
    mellomello Posts: 555member
    Quote:

    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.



    \
Sign In or Register to comment.