Andy Zaky: How to properly use Apple’s guidance to accurately forecast earnings

“It seems that almost daily now there’s yet another worthless article that incompetently tries to forecast Apple’s fiscal Q1 earnings by taking a look at Apple’s EPS guidance,” Andy M. Zaky writes for Bullish Cross. “The problem with that approach is that Apple’s EPS guidance is entirely useless. Understanding how to properly use Apple’s guidance to forecast earnings will get you to within 5% margin of error. Yet, to get there you have to use the right methodology. Trying to extrapolate anything from EPS guidance simply isn’t it.”

Zaky explains, “Our objective is thus two fold. First, we going to demonstrate how one can very accurately put together one of the top income statement forecasts that will beat every single Wall Street analyst simply by using nothing more than Apple’s guidance. Secondly, we’re going to show why the method of doing so requires one to simply ignore Apple’s EPS guidance as being random, meaningless and distracting.”

Read more in the full article – recommended – here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. It’s great to have someone walk us through their thinking approach on such an important issue. Whether we agree with it or not, it is “out there” for all of us to see and subsequently test his conclusions and the major elements that are logically driving it.

  2. Talk about a contradictory statement. And no, I’m not going to read the article because I think all of this guidance crap is bullshit. That, and the fact that I don’t really care.

  3. Excellent reading. Apple is steady, dependable and reliable.

    Will this article would appear in Apple2.0 by Philip Elmer-DeWitt, as he seems to be banging on about EPS quite a lot lately …

    … quick check and yep there it is, under the headline “Apple analysis for idiots”

        1. The point is it’s not some esoteric trick. Zaky himself writes:

          “From there you simply add $50 million to Apple’s OpEx guidance as Apple consistently under-estimates its expenses by about $50 million,”

          So why doesn’t everybody do that when the result is consistently more accurate than estimates made w/o adjustment?

  4. No one can do it better than Mr. Zaky. I highly admire his candor and audacity telling “Wall Street” how to do their f’ing jobs! If only he could rip into them individually — man, I’d love to read that. I very much look forward to reading his articles and get the popcorn out each time.

    On a side note, I wish Bullish Cross wasn’t as expensive as it is annually. Although the content is very informative, to the average Joe on the street like myself, I don’t have $500 to drop for a membership. If it was half the cost, sure, I’d be a member. Just saying.

    Now then, I best get a napkin and wipe the butter and salt from my iPhone.

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