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. Now you know why Apple scheduled the “what´s new” shindig for Wednesday – take away from the so-so news of today. Get the “no wow” from Apple financials off the business pages.

    But what Steve is showing on Wed. better be good.
    A pink Madonna nano won´t cut it.

  2. Qwerty:

    “Enterprise desktop deployments” … are corporate computing people really talking about “deployments” now? “Enterprise” struck me as being silly enough.

    If so, I’ll bet they also talk about “pre-positioning assets” on the desktop … do they talk about “invading” the desktop? Or the desktop “taking fire”?

    Possibly from “bogeys”?

    It’s all more than a little ridiculous–possibly even more ridiculous than the days when everyone in business wanted to sound like a scientist–and makes me think that the thesis of the following book may be true in more ways that even its author suspected:

    http://www.amazon.com/exec/obidos/tg/detail/-/0195173384

  3. I’m a fan and a stockholder but I think the only reason the sell off isn’t worse is because of the event tomorrow and if something amazing is not introduced, the stock will fall even more tomorrow. Trust me, I wanted Apple to hit $70 a share tomorrow for a good profit taking opportunity, but that’s as unrealistic as the anal-sts expectaions. At this point it would be amazing for it to make a new high.

    I tend to doubt a video iPod coming out tomorrow but if it were, I hope they have the content lined up.

  4. I’m so over Apple now, unless Apple comes out with a iStereo that has a iTMS interface and DSL modem/800 number at a reasonable price don’t expect their stock to go much further up.

    WHY? the computer geek world is saturated with iPods, now it’s time to hit the majority of computer illiterates.

    OH By the way the Motorolla ROKR/iTunes phone is a absolute piece of cheap plastic sh*t, even the salesperson couldn’t get it to work.

    I’m getting a Nokia.

  5. I would like to know who sold off 9 million shares … who is manipulating the market and why now … after hours trading should be illegal … it seems to me to be insider trading … anyway, I am buying every share of Apple stock I can afford…

  6. I’m so over Apple too. I’m quitting this money sucking cult. Apple is turning into M$ (i.e., flat, stale, money crazy, and taking customer’s for fools, and partner’s for a not so fun ride.) Steve you are begining to stink just like Bill.

    I’m putting my money into IBM, a real company.

  7. You guys can deny it all you want, but this is the proof that no one wants to admit! Apple is done for. I expect they’ll be out of business by Christmas. I mean, it’s called an iPod. They should have called it an awesomePod! That would have sold way more. Big mistake Apple. Now it’s only a matter of a few weeks before Microsoft buys you out and makes you devlop X-Box 360 (Awesome Edition) games.

  8. Gecko and Troy,
    you are both dicks.
    Shame on you, Steve, for stooping to their level.
    And iDon’t . . .
    IBM sold their PC market to Lenovo months ago, duh.
    Kelso,
    you won’t see it happen. So go buy yourself a DellDJ
    and enjoy the inefficiency.
    Jon,
    very impressive!

    TimD . . . you must have a good head on your shoulders.
    Shadowself,
    “tarot cards and deer entrails” LOL You forgot tea leaves
    and rune stones!

    Dedicated Mac User since 1978. Not caving in anytime soon.

  9. I remember when the iTMS was only a rumor. I won a sales contest at work, and my prize was an iPod. The prizes for the cotest were custom prizes (each person would earn a prize that they had interest in), so they had not yet been purchased at the time.

    I told the sales managers that I work with to hold off on ordering my iPod, because new ones were coming. I also told them to buy Apple stock at the time, because the announcements that were coming, although no one really knew what they were going to be, would be huge.

    That was back when AAPL shares were selling at $11… before the last split.

    They held off on my iPod, but they didn’t buy stock. I got my 3G 30 gig, but all they got was “I told you so.” LOL

  10. Why is it that half the time my post doesn’t take? I have to hit the back button, copy my text, reload the page, paste the text into the comment box again, and hit submit.

    This isn’t my machine because it happens on both my Quicksilver running Panther, and my Powerbook running Tiger.

  11. I think the consensus around Wall Street is that AAPL has to have between 20-25% market share for the stock to really be something to hold on to. Until then you’re going to get people bailing at the first sign of trouble.

    This is also after hours trading. The real traders are at home banging Sean Young and Darryl Hannah.

  12. Someone is being set up here. Apple announced that they did well in this quarter and the stock goes down?! It looks like some smart people are aware that tomorrow something big will be announced and these people will make a fortune from the AAPL stock they bought cheaply today.

  13. Guys, I just took out a second and third mortgage on my house and I’m buying $1 million of AAPL stock tomorrow!!! This will make me a millionaire!!! Everyone here should do it! DO IT NOW! Let’s show these M$ Weenies what REAL MEN are made of!!! GO AAPL!!!!

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