“Apple Computer offered a disappointing earnings outlook on Wednesday, but don’t expect investors to throw in the towel quite yet,” Troy Wolverton reports for TheStreet.com. “Wall Street seemed willing to excuse the company’s guidance — which was significantly below the Street’s earnings and revenue targets for the current quarter — as simply an example of management being conservative. In recent quarters, the iPod maker’s results have consistently topped the company’s own outlook and Street expectations, most notably in its just-completed holiday period, when Apple’s results exceeded sales guidance by more than $1 billion. ‘I’m taking a five-year view,’ says one portfolio manager at a major financial services firm who is long Apple. ‘Each miss to me looks like an opportunity [to buy the stock],’ the portfolio manager adds.”
Wolverton reports, “In their reports today, sell-side analysts generally reiterated their optimistic ratings on Apple. Piper Jaffray analyst Gene Munster’s reaction, for instance, was typical: ‘We would be buyers of AAPL shares on the pullback today as we believe March-quarter guidance will prove to be conservative given that Apple’s strategic plan, competitive position, new product roadmap and market opportunity remain unchanged,’ Munster wrote, reiterating his outperform rating on Apple shares and his $103 year-end price target. Piper Jaffray has not done recent investment banking business with Apple.”
“Apple forecasts that things will slow down in the current first quarter. Company officials predicted that sales will be 7% and earnings 13% below analysts’ estimates,” Wolverton reports. “The company blamed the disappointing outlook on a seasonal slowdown in iPod sales and potential softness in shipments of its Macintosh computers. Apple recently updated two of its computer lines with chips from Intel. However, one of those lines won’t ship until sometime next month and the company indicated that it may not be able to meet demand for either of the two Intel-based lines in the short-term.”
“But not everyone is convinced that Apple’s best days are ahead. Invictus Funds recently sold off its long position in Apple, and partner David Schamens is looking for the right opportunity to short the stock,” Wolverton reports. “The company’s guidance is the first indication that things are slowing down at Apple, Schamens said. While acknowledging the company’s recent success, Schamens argues that its computer and iPod sales are both going to ‘hit a wall.’ Corporate computer users have standardized on Microsoft’s Windows platform, and Apple is going to have a tough, if not impossible, time cracking that market, which will limit the amount of share the company’s computers can claim, he says.”
Full article with much more here.
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I still remain optimistic about 2006 as a whole. $103 — here we come!
“They will see us waving from such great heights…”
Looks like the Apple quarterly earnings conference calls are going to be available as Earnings Podcasts from here on out. Nice.
http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=74942331
We all know that apple will stun the world yet again in 2006, roll on 1 April
“Looks like the Apple quarterly earnings conference calls are going to be available as Earnings Podcasts from here on out. Nice.”
They’ve done this for the past few conference calls as well.
“Corporate computer users have standardized on Microsoft’s Windows platform…”
“American drivers will never buy Japanese cars…”
sheesh.
“Schamens argues that its computer and iPod sales are both going to ‘hit a wall”
Where is this info about Apple coming from? His a$$. Microsoft just announced that their work on WinXP SP3 is being postponed until sometime in 2007. M$ is doing everything to be able to push Vista out the door before 2006 ends. Vista will be offered in six flavors last time I checked. This alone should cause a lot of confusion. And many companies hesitate to upgrade to Win XP, let alone some OS experiment that is Mac OSX visual rip-off.
And lets not forget the other side of the PC equation. Cheap Hardware. Most of the those $300.00 PC systems will charge around $100.00 for shipping and handling. That’s how they make their profit. That, and selling TVs.
So, who do you think will hit the wall first?
Vista will be offered in six flavors last time I checked. This alone should cause a lot of confusion
Not for me, I buy the best so I won’t whine the next day.
Let guys like Schamens go ahead and short AAPL. They’ll lose millions of dollars and the only ones they will have to blame will be themselves. Losing money big time for your clients is the only way these guys will get a clue.
Keep that guys word on here, and then at the end of the year lets check out the price of apple stock. Then post another message then, and see how invuctus fund does without apple stock
Who’d of thought that iPod sales may dip a bit after the Christmas buying frenzy? Give it a couple of months and the release of some more Apple products and all the analyst will be bigging up Apple.
The stock is hyped up and Intel is dragging their butts on these new Core Duo’s which Apple might not fill demand of the MacBook Pro’s until summer sometime.
Professional laptops and Towers make up the most of Apple’s sales, with the rest only making a small contribution.
Since the Pro laptop line has been SERIOUSLY malnourished for quite some time it’s entirely expected that Apple will have a rush of orders, have trouble meeting demand not for processors, but from Quanta Computing in Taiwan who not only makes Mac’s, but PC’s as well.
Apple is still building plenty of more stores, combined with plenty of Intel processors and with the (hopefully) ability to run Windows programs at full speed (with DarWine or Mac OS X) should see Mac sales and stock go through the roof.
So perhaps it’s best now the stock comes down considerably so it will go up OH SO MUCH FURTHER AND SPLIT BABY SPIT IT OUT OR SWALLOW!!
M$ SUCKS!! GET AN MAC.
When will people stop worrying about short-term fluctuations in a company’s stock price? It’s sales, profits and re-investment (into R&D, in the case of tech) that determine a company’s future. The stock price is only important if the company plans on using its stock to buy out a competitor, for example. Otherwise, it’s just a (very inaccurate) indicator of the company’s future prospects, as well as a vehicle for a quick buck by speculators (sometimes referred to as “investors”).
Inflated stock prices are also good for execs hungry to cash in on their options – remember the last bubble.
And I don’t believe AAPL has that problem.
“loco juice”? Schamens has been smoking the loco weed!
You guys crack me up. Common sense says that Apple is going to have a very hard time making inroads into the corporate world. They cost more and the software is a problem. Many companies have custom software that will only run on a PC. There is also the problem of lost hours if they switched because everyone would have to learn a new system.
Sure these can be overcome and eventually the companies would come out ahead due to less down time BUT most people in management are not going to go through that because it will hurt their bottom line in the short term.
Then most people will just buy a PC for their home because that’s what they use at work. They think that it is easier like that.
No matter how great OSX is Apple will only gain so much market share until Jobs opens the coffers and starts really advertising the benefits of OSX over Windows. Of coarse then he risks pissing off Microsoft and loosing Office for the Mac. Weather you will admit it or not that would be a bad thing. Everyone uses Office and most everyone has no interest in learning another office suite.
Apple doesn’t need the corporate market. They’ve never had it and last I checked they made millions of dollars without it.
Do corporations buy iMacs? Do they buy iBooks? iPods? Mac minis? Do they buy personal photo software or simple DVD authoring software? Do they buy MP3 software? Do they stand in line at Apple stores to buy iPod accessories?
Show me a person who paid money for the copy of MS Office they have on their home computer and I’ll show rube. If that’s you I’d not shame yourself.
Apple survives by making a profit in the consumer space because individual consumers are willing to pay a little more for better value. Other PC vendors cannot do this because they cannot differentiate themselves from the next.
I’m not ashamed to pay for my things. If I want something, I have choices: pay the asking price, don’t buy it, or compromise my own integrity and take it, even when it’s not mine.
However clever someone’s moniker is capitalized, I have to wonder whether they actually think. Or have character. Or are perpetually 12. Or have a witty comeback because they have no moral standing. Or…um… something like that.
I never understand why a conservative earnings outlook is disappointing. If the reasoning appears plausible and the lines are dotted what is the issue? I don’t know, as a stockholder I prefer conservative vs. overstated. I always think of Apple as a poker player – never show all of your hands, have room to maneuver. I’ve followed bloated stock of companies I work with/for and it’s just a farce. Someone wrote in a different thread that the brokerage firms intentionally want stocks that have reached a certain height to go down so they can buy them cheaper. When I read things like this it reaffirms its just a game.
I also am always amazed at the analytics associated with Apple presentations and particularly their financial calls. I often wonder whether I am listening to the same report as the expert analyst and wonder how can their “spin” be different. The balance of information is so clearly subjective while still stating it is objective. I appreciate people listen to the expert opinions which by the nature of that comment implies subjective thinking on the part of the analyst. It just appears there is so much self interest it reminds me of that movie Boiler Room.
When so called experts haven’t done their homework and make suggestions of what the consumer wants and says it enough that the next analyst picks up the mantle of misinformation and before long everyone thinks it’s fact.
exactly WHY i refuse to buy shares
total con
this just in….
Analysts never seem to have a clue as to what is going to happen with Apple. Film at 11.
To all of you who are AAPL stockholders or who intend on becoming one. Just try digesting this tidbit:
“Wall Street bonuses are expected to have hit a record $21.5 billion in 2005 from $18.6 billion in 2004. – MSNBC”
Then do some research into HOW they make this money. It will all boil down to one thing – gaming the stock market.
The retail investor does not stand a chance against these people. So don’t play the game. Always invest for the long term. Don’t watch the stock price. Reserve a portion of your paycheck for buying the company’s stock and when you have the money buy it – regardless of price. At the end of the year re-evaluate your strategy. It’s that simple.
Here we go again – ‘Heads-up everybody Apple computer will be lucky to be in business by the end of the year!”, “Apple shares fell again today and anal-ysts predict the end of the road for Apple Computer.”
Come on, give me a bleeding break. I’ve been watching Apple “go out of business” for the last 20+ years. Its my belief that some financial anal-ysts have suspicious, and hidden, agendas.