“Apple Computer’s revenue shortfall and rising oil prices pulled on U.S. stock market futures in early trade Wednesday,” The Associated Press reports in an article headlined “Stocks Set to Open Down on Apple Shortfall.”
“Apple Computer quadrupled quarterly profit on sales of iPod music players and Macintosh computers, but revenue missed consensus estimates.”
Yesterday, Apple 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. For fiscal 2005, the Company generated revenue of $13.93 billion and a net profit of $1.335 billion, reflecting annual growth of 68 percent and 384 percent, respectively, and representing the highest annual revenue and net profit in the Company’s history.
Full article here.
Apple had their best quarter and best year in the Company’s history, but because it didn’t meet a consensus figure invented by analysts who haven’t been right about forecasting Apple’s earnings for years, The Associated Press calls Apple’s report a “shortfall.” Only where The Street meets The Mainstream Media. Apple easily exceeded their own guidance. Apple’s quarterly profit quadrupled! This, friends, is how Wall Street works and a valuable gift for those who missed out on Apple the last time around. This artificial hysteria presents quite a tempting buying opportunity, if you’re so inclined. We think it’ll be short-lived.
Remember, the number of iPods that consumers bought in July, August, and September will pale in comparison to the number that will be purchased as gifts in the current holiday quarter. And the steady increase in Mac’s overall unit sales momentum has to be extremely encouraging to Apple.
Related MacDailyNews articles:
Apple Q4 05 earnings report: best quarter & best year in company history – October 11, 2005
Apple will be back in the mid to high 50 area in 3 to 4 weeks. BUY IT NOW!
I am partyin’ waiting for the news today!!!!!
The reasoning here is that the analysts had factored into their price of the stock the sales and profit that Apple would have over the quarter/year. Since it didn’t meet these estimates, they had to readjust their value on the stock. Yes, it has nothing to do with Apple per-say, but more to do with what the analysts were anticipating and factored into the price of the stock. Markets just opened and the stock is down 6.84%.
Really, that’s not that bad.
Most of the drop overnight was from small investors. 100 and 200 shares. There were a few of over 10,000 shares but only a hand full at most.
This may sound like bad news, it really isn’t. If you have a couple of extra dollars around, it maybe a good opportunity for you to pick up a few shares.
I anticipate Apple to be back over 50 in a couple of weeks, or end of the month at the latest.
Headlines have so few words to use, it is difficult to tell the whole story in them.
True that, the $48 open is quite a discount on the stock that was pushing $55 this time last week. The question is, does the same environment exist to drive the stock higher?
AAPL is under the affect of “momentum investing” – same thing that drives Miami condo sales through the roof. Same thing that drives GOOG to 300+ on sales and a track record lower and shorter than AAPL.
So what will keep up the momentum? The nano caused quite a spark three weeks ago. Perhaps today’s announcemnet will. If it does, certainly the stock with regain what it lost and savvy investors will gain 6% in a short time.
But if today disappoints, or the market _percieves_ competitors gaining any ground, the stock will be punished for the risk. It isn’t fair, but it is the way the market works.
MDN word: although
Whelp .. it’s being spun that way in the American press because Americans are evil. What else could it be? I’m so glad I left that shithole country.
To me, the AMAZINGLY WONDERFUL aspect of this is that our Apple is now big and influential enough that by itself it can pull down the whole market’s opening?!?!!
buy buy. Now’s the time.
people saying “expect the stock to be back” need to understand better how the markets work. The PE is still very high compared to the merket segment leaders. People (the 75% institutional owners I shoudl say) are NOT investing in Apple because of OS X or cool hardware, they are investing because of iPod and digital music.
So Apple HAS TO makes those numbers work. Fair or not. They have to.
What I heard on yesterday’s conference call is that iPod nano demand is so strong, they may not have equilibrium (supply = demand) until after Christmas. Oops. If today’s announcements are iPods, then it may muddy the watters on what people will buy for Christmas. Instead of a nano, maybe it’s a vPod. But this could cannibalize sales too.
The sad thing about yesterday is that Apple proved the Halo Effect is working, and had they posted strong iPod sales (8 million) and flat CPU sales, the stock could have done the exact same thing.
MDN word: her
Analysts missed the big announcement. Apple is forecasting 4.7 B for Q1. That’s 1 Billion more than Q4.
Watch AAPL going up again in 4 hours after Apple introduces the product(s) that will generate that extra $ 1,000,000,000.00
MDN Word= Get; like ‘Get it?’
MDN, we all know you are not well educated in business, but when you say “…but because it didn’t meet a consensus figure invented by analysts who haven’t been right about forecasting Apple’s earnings for years,…”
it just reveals it even more.
Apple gives the guidance that these analysts base their consensus figure information on. It is Apple that is setting the pole higher or lower regarding earnings.
Yeserday, Apple set the target for the next quarter:
“Along those lines, (Apple CFO Peter) Oppenheimer projected in-line results for its coming first quarter. The company expects to earn 46 cents a share — or 49 cents a share excluding stock-based compensation costs — on $4.7 billion in sales.”
The last paragraph in this article:
http://www.thestreet.com/_mktwrm/stocks/troywolverton/10246796.html
So, MDN, edukate yerself on stok-piking matters.
Apple sets the estimates, the stock analysts agree or don´t agree and base their stock buying or selling on it.
Got it???
About 18 minutes into the trading day and it’s down only 4.34%. (49.34) The upward trend is already showing.
We could close over $50 today. So much for my two week preduction.
Genius Stockboys,
MDN/iPodDN actually gets it pretty much right. They called the AAPL correction immediately upon release of the earnings report – before many others even had the earnings report posted. And I think they’re right that it’ll be a short-lived dip and a prime buying opportunity.
Apple easily exceeded their own guidance.
btw .. maybe I missed it, but I haven’t seen anybody in here mention that the Apple Quarterly Earnings Calls, including Q4 which was added today, are available as podcasts, so ..
http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=74942331&s=143441&i=1157907
Maybe I’m getting more conspiracy-minded as I get older, but doesn’t this smell like the big Wall Street players setting up the small investors to dump Apple stock so that the insiders could get it at a discount? As it turns out, those selling on the “news” were small investors. I bet the big guys are buying at this price and laughing all the way to the bank…
Jake
I’m normally not oriented toward conspiracies, but this one…
To me, the AP headline simply re-affirms what many of us here have long been proclaiming. For a company that has beeen written off how many times, its resurgence has gained sufficient strength that, when it disappoints the Street–however stupid that may be–IT ACTUALLY MATTERS! In its own way, this is a stunning affirmation of Apple’s success.
I bought a pile of AAPL last night at $46.00. I doubt we’ll ever see that price again.
Feeling smug.
Apple sets the guidelines…no. Apple releases their predictions and if they REALLY shortfall they can get into a lot of trouble w/ the SEC (lying). There is an assumption about the tech sector that stocks are treading on thin ice and part of the sector stays in business by ‘the argument from future facts’. It works for many. It’s a priori performance filings all around. If you say you’re going to make x amount then you’re stock won’t instantly tank and you have the value to make large/collective purchases and stay afloat, because of this you manage to reach your target on faith alone. Then consider Apple. The aren’t exaggerating as above, no are they being extremely conservative (perhaps a more realistic tactic for those companies where faith alone might end them up in trouble). Apple may be releasing slightly conservative financial, but they are now so diversified that they can meet these every single time. Growth quarter after quarter exceeding their own predictions is pretty much blue chip (old style). So if you’re an analyst and you don’t know much about Apple you might think they either trade on future facts or are extremely conservative. Given strong sales of ipods and spin you MIGHT go w/ extremely conservative so you pump it up too much and when it meets and exceeds the company release, but not yours you might look a little bad. That’s what happens and everyone thinks the sky is falling.
Real+MS might also have triggered some sell offs if you combine that w/ the much reported/rumored label negotiations problems apple allegedly has.
I think a lot of people are going to be happy they purchased stock last night. Remember, Apple has such a control of flash memory now that a backlog means nobody else is bringing anything to market at a competitive rate w/o taking a loss.
…and then there’s today.
Can go to Steve Jobs and his secretive a*s. Yes these people are morons, but as things have gotten better for the company Apple has actually REDUCED the amount and detail of information they release.
buswhat? sez: – “Apple sets the guidelines…no.”
Wrong-o buswhat?. CAn´t you read what the Apple CFO said?
If Apple did not set the earnings guidelines (or as you call them “predictions” – as if they look into a crystal ball) then no analyst would have anything to base anything on. Who else knows better what the sales are going to be than the CFO? You think the stock analysts have access to the same info as the Apple CFO??? Get real.
Apple is setting its earnings guidelines based on lots of information only they have. If Apple says earnings will be 47 cents a share next quarter, based on the sales guidance it gives and then during the quarter something interrupts the sales (war, problem in manufacturing, bad P.R., whatever) then analysts revise the Apple guidelines. If earnings look like they are way off (negatively) for what they gave, usually the CFO will issue a change in what they think is closer to reality. If sales and earnings are going to be much higher than the guidance they give, they won´t tell anyone; just let it be a postive surprise.
——
It does not help that Apple does not give info on specific product sales anymore. Such as how is the mini really doing? What computers are and are not selling?
MDN do not blame analysts. Their mistakes caused not only the today’s fall but also previos rise of the Apple stock prices. It is merely a correction what happened today.
No matter wether analysts were right or not in forcasting the Apple’s financial performance figures the stock price as on yesterday was based of those figures forcasted by analysts. When the actual figures were released by Apple the stock price whent down. If Apple’s figures were similar to the forcasts then the would be no correction, but if the analysts’ figures had initially been more correct there would have been no correction today either but for a different reason – for the would have been no rise of the stock price.
Apple needs to be more transparent with its finacials.
iPod sales maybe $gazillion, but some ipods give more profit than others per unit. Is the trend that people are trading down – buying the less profitable ipods at the expense of sales of more profitable ipods?
Is the mac mini – which was supposed to be the product that was to get PC owners to switch- selling well? If not, are sales of Mac computers just to Mac buyers?
What are the trends for Mac computers sales?
Are high end desktops selling well? Is Apple only selling low-end, entry level computers?
Who knows?
No one seems to know. Less info means stock buyer beware.