“Apple (AAPL) and CFO Peter Oppenheimer have a history of being conservative with their guidance. Listen to a conference call, or read a transcript and you’ll hear repeated remarks about forecasts the company can ‘confidently meet.’ It’s like a lawyer that won’t ask a question in court without first knowing the answer; similarly Apple seems incapable of making a projection without being sure it will come true,” Seth Gilbert writes for Seeking Alpha.
“The history tracks back quarter after quarter… By now one would think the markets would be used to it. It’s an obvious enough pattern: first Apple gives conservative guidance about future earnings. The economy, a product shift, a parts shortage…something, warrants more caution. Next, the numbers come: conservative projections are blown away by stellar earnings that probably shouldn’t have been a surprise. Then, lest expectations get too lofty, the upside of the stellar earnings is tempered with another round of conservative guidance. It’s the Apple M.O., the ‘Oppenheimer effect’: Apple’s way of under promising, over delivering then under promising again,” Gilbert writes.
“Last quarter in the earnings call Peter Oppenheimer was crystal clear. He told analysts, ‘[Apple is] giving very strong guidance. We are very confident we will achieve it.’ And guess what, that’s exactly what they did. This second quarter, the wording isn’t much different. In forward guidance for Q3, Apple is projecting revenue of $7.2b and earnings of about $1.00. Those numbers seem a little low, and it’s likely they will be,” Gilbert writes.
Much more in the full article – recommended – here.
Please note that Oppenheimer said in the conference call, “Looking ahead to the June quarter… we are targeting revenue of about $7.2 billion, or approximately 33% growth over the prior June quarter… We expect to generate EPS of about $1.00.”
“About $7.2 billion. About $1.00 EPS.” Reports that exclude the “about” are incorrect. Apple is not guiding “$1.00 EPS,” they are guiding “about $1.00 EPS.”