Apple misses top line estimates, shares drop like a rock in after-hours trading

“Prior to Tuesday afternoon’s earnings announcement, most investors didn’t seem worried about Apple Computer’s fourth-quarter results,” Troy Wolverton reports for TheStreet.com. “Maybe they should have been.”

“While the company topped bottom-line expectations, its sales fell short of Wall Street’s estimates. More importantly, iPod sales were nowhere near the heady number bandied about on Wall Street. And following the company’s earnings announcement, its stock dropped like a rock,” Wolverton reports. “Excluding several tax benefit items, the company earned 38 cents a share, which narrowly beat Thomson First Call’s analyst consensus estimate of 37 cents a share. But at least on the revenue line, it wasn’t good enough for the Street.”

[Apple’s actual revenue: $3.69 billion vs. analysts’ consensus estimate: $3.73 billion]

“In the quarter, Apple shipped 6.45 million iPods. In contrast, analysts were expecting the company to ship in the neighborhood of 7 million units, and some whisper numbers were reaching as high as 9 million units,” Wolverton reports. “Although the Street might have been getting ahead of itself, Apple’s results were nothing to scoff at. iPod shipments might not have been as high as some were hoping, but they still rose 5% from the company’s third quarter and 220% year-over-year. Meanwhile, the company’s line of Macintosh computers posted strong sales as well, with unit shipments up 5% sequentially and 48% from the fourth quarter a year earlier.”

Full article here.
Apple shares currently stand at $46.06, down $5.53 from market close of $51.59 in extremely heavy after-hours trading volume of 9,798,006.

Related articles:
Apple shares plummet in after-hours trading – October 11, 2005
Apple Q4 05 earnings report: best quarter & best year in company history – October 11, 2005

45 Comments

  1. I cant stand this Wolverton dweeb.
    His article has such a tone that he’s actually thrilled that the stock dropped. Someone please punch him for me.

    Keep in mind that ALL numbers were in line with Apple’s expectations. It’s these unrealistic pr!cks that keep rasing the numbers that causes this.

  2. “Keep in mind that ALL numbers were in line with Apple’s expectations. It’s these unrealistic pr!cks that keep rasing the numbers that causes this.”

    MDN, something to keep in mind when a firm estimates 43 million iPods in 2006. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    That being said, I totally agree with you hammer. Wolverton is a major league !@#$(. His articles about Apple are always filled with snide little insinutations and even when he is a master of “damning with faint priase” even when there is something positive about Apple.

    But as I said, we have the big special event to look forward to tomorrow, and I think the sell-off will prove to be quite a non-news item.

  3. I work for Wall Street.

    So I am really getting a kick out of most of these replies.

    Some of you guys are very good at making it sound like you know what you are talking about.

    But trust me…. You don’t.

    I think you just want to make yourself sound smart, when in reality you dont know what you are talking about.

    This is how bad info gets passed around.

    If you dont know about the topic….Dont make yourself sound like you do.

    Cuz some Macheads believe anything they hear.

  4. Like I’ve always said nothing is good enough for the stock idiots when it comes to Apple. I’d like to see how many Dell DJ’s have sold. 100 maybe 200? Apple sold 6.5 million iPods again in one quarter. Best results ever for Apple so I don’t know what anal-ist want. Apple is doing a great job and something tomorrow is going to make that even better.

  5. I work for TheStreet.com

    So I am really getting a kick out of most of these replies.

    Some of you guys are very good at making it sound like you know what you are talking about.

    But trust me…. You don’t.

    I think you just want to make yourself sound smart, when in reality you dont know what you are talking about.

    This is how bad info gets passed around.

    If you dont know about the topic….Dont make yourself sound like you do.

    Cuz some Macheads believe anything they hear.

  6. I work for Mac.

    So I am really getting a kick out of most of these replies.

    Some of you guys are very good at making it sound like you know what you are talking about.

    But trust me…. You don’t.

    I think you just want to make yourself sound smart, when in reality you dont know what you are talking about.

    This is how bad info gets passed around.

    If you dont know about the topic….Dont make yourself sound like you do.

    Cuz some Macheads believe anything they hear.

  7. Yes, Mr. Gecko, we appreciate the very specific advice you so tellingly have given out. Pro bono, no less! And while you’re at it, why doesn’t a “Wall Street” genius like you actually spout out something more than generic “I’m a Wall Street insider” crap? In other words, put up or shut up. But your posin’ don’t impress any of us. Your so-called advice is not actually appreciated, Mr. Gordon “Wall Street Poseur” Gecko.

    That being said, anyone listen to the earnings call? Tim Cook specifically said Apple has new iPods other than the nano that will be introduced for the holiday season.

    Funny how “big news” like this are missed and unmentioned by Gordon “I’m the Wall Street Sh*t” Gecko.

  8. Ask Warren Buffet how he got his millions and he will tell you: “Thanks to the arrogance of the financial analysts”. People that are selling shares in today’s after hours are doing so because analysts expected superior iPod sales, based on estimates from a poll. What a crap… And the sellers don’t even think on tomorrow’s show. What a world.

    MW nuclear. As in “This is not nuclear, it is just the anal-lysts.

  9. When the unreasonable (ludicrous?) expectations were coming out several weeks ago, a few of us here stated this was just a set up by the analysts for Apple not to be able to meet those high expectations. It was a clear set up for Apple to fail.

    Apple did extremely well. However, it could not exceed, or even meet, unrealistic pronouncements made by so called analysts setting them up.

    It is somewhat like what happened a few years ago when 99% of the PC makers were starting to lose money every quarter yet Apple made money. However, one quarter Apple held an analysts’ conference call and warned that Apple would make significantly less than analysts had predicted. Apple was still going to make a sizeable profit, just not as much as the analysts predicted. Thus Apple’s stock dropped by almost 50% in a single day (or maybe a couple days, I don’t recall exactly).

    Back in the dark days, there was even a “well respected analyst on Wall Street” with whom I had a running argument/discussion for a few weeks about his prediction that Apple would go down well below $8 a share. He actually predicted it might go as low as $6 a share. He predicted this when Apple’s book value was over $10 a share. (It was trading at about $13-$14 at the time.) He had some agenda about Apple to which I could not get him to admit. He even (privately) admitted that Apple would have been a huge take over target if the stock price even got close to book value. However, his public statements and analyst reports to investors was to sell their Apple stock and wait for it to be $6-$8 per share to pick it back up! (This analyst even went so far as to get himself anointed as THE stock analyst as part of the old Evanelist team — that is until I explained his stupid statements to Guy.)

    Seriously, over 90% of these analysts would be better off with Tarot cards and deer entrails.

    Wallstreet often has over reacted to news about Apple — be that good or bad news. This event is no exception. Bad news that Apple did not sell a billion iPods, bad news that it did not gross a googleplex dollars, and bad news that it did not make a net profit of 100 trillion. Bad Apple. Sell. Sell. Sell. (See, even I can make unreasonable statements as well as those stupid analysts.)

  10. On TV news, when a reporter quotes White House sources, they are usually telling you what some other White House pool reporter speculated at the water cooler, coffee pot or Coke machine. keeping you own counsel is not a very wise thing. The same mentality prevails on Wall St.

  11. Gordy: So, tell me, what do you expect AAPL to do? You imply that you have some “higher knowledge”. Are you bitter that you didn’t buy a couple years ago? As far as I’m concerned, this is marking the transition from AAPL being a fast-paced growth stock to a consistent solid performer. It’s finally growing into it’s high PE and showing signs of increasing computer sales, not just iPod. This dip isn’t a sign of trouble, it’s a sign of increasing stability… the momo traders don’t like that, so they leave. I won’t miss them, even if they took some change out of my bag.

  12. Didn’t they say something in the analysts call about great new PowerPC hardware coming? I can’t wait. I’ve been waiting to buy a new high-end Mac.

    Tomorrows product introductions will have little affect on the near term stock value but I’m betting that over the next 3 to 4 weeks it will creep back up into the mid 50’s. Now looks like the best opportunity to buy AAPL (with a hope of a short term gain) that we’ve seen in the last 10 weeks. BUY!

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