Apple’s expected ‘miss’ may already be priced in

“A key question for Apple Inc.’s investors heading into what is likely to be a challenging earnings report on Tuesday afternoon is whether the stock — down nearly 45% since last fall — has been punished enough,” Dan Gallagher reports for MarketWatch.

“Apple is widely expected to report a sharp drop-off in iPhone sales compared to the December quarter, along with lower profit margins due to a number of factors, including more sales of the iPad mini that could be cannibalizing sales of its more profitable, larger tablets,” Gallagher reports. “But much will depend on expectations heading into the report, as well as what the company actually says on its call discussing the fiscal-second-quarter results and outlook for the June period. That call is due to start Tuesday at 5 p.m. Eastern time.”

MacDailyNews Note: MacDailyNews will cover Apple’s conferenece call with live notes as usual starting around 4:50pm EDT on Tuesday, April 23rd.

Gallagher reports, “Expectations are being reset — though possibly not by enough… Since the end of February, analysts’ consensus earnings target has come down another 2% for the second fiscal quarter, according to data from Thomson Reuters. They now expect Apple to report earnings of $10.01 per share on revenues of $42.4 billion for the March quarter, according to consensus estimates from FactSet. The company earned $12.30 per share on revenue of $39.2 billion in the same period last year.”

“There are other potential variables in Tuesday’s report. A surprising beat for the quarter, a forecast that is higher than Wall Street’s consensus or a changed ‘capital-allocation strategy’ that includes a raised dividend are all possibilities that could turn sentiment on the stock,” Gallagher reports. “The highly secretive company is very unlikely to give any information on up-coming products launches, however.”

Read more in the full article here.

11 Comments

  1. Can someone explain to me why Google’s stock keeps climbing? I mean with all the lawsuits against Android and Samdung I am positive if that were Apple the stock would be at about $5.

    1. You see, Google’s in trouble in trouble all around the world for ignoring other people’s IP and for trying to bully other companies with standard-based patents. Revenue is up, margins are down. Naturally their stock soars.

      Amazon is another example, the more they sell the less they earn. In fact, they lost money last quarter I think. Naturally their stock soars.

      Apple on the other hand, is in the unenviable position of seeing increased revenue and profit. In fact, last quarter they reported the highest quarterly profit of any tech company in history. Naturally, this is indicative of a failing enterprise. I’m surprised you can’t see it.

      1. Ahh, ok that makes perfect sense now thanks for the explanation. Oh well I guess Apple will just have to deal with making money so fast they don’t know what to do with it. 🙂

    2. It is coz Google is only earning 1/4 of what Apple earns. Still has MUCH room for those motherfuckers to DREAM how BIG and how profitable Google WILL earn.

    3. I had this exact conversation with someone over the weekend … Why is Google with their stable of inferior products climbing?

      The only answer we could come up with was that Google plays the PR game better than Apple. They build excitement over stupid products like GOOGLE GLASS, while Apple thinks mysterious is better. I personally think it’s time Apple starts playing that game. You don’t have to come out and give me all the specs on an HDTV or an iWatch, but at least admit that you’re either working on it, or not.

      AAPL stock is being held by a lot of people who don’t have the tenacity for a long view on the stock. My guess is no matter how much is “built in” if the news tomorrow is not good, the stock will continue to plummet if there are no signs for a near future turn around. And that turn around feeling could be had simply by saying – “we expect an Apple HDTV to be released within X months and an iWatch to be released in Y months”. That would at least turn everyone’s attention to speculating about what’s coming, how good it will be, and how much $$$ Apple will make. Instead of speculating about why it’s not released yet and reading the tea leafs of their supply base’s already reported numbers …

      Of course, if Apple comes out tomorrow and says they had their best sales quarter ever, and they just put the most money ever in the bank this is all moot.

  2. Ya know what I think? I know you care, so…

    I think Wall Street is collectively p.o.’ed at Apple because they can’t get any inside info on the company, and therefore find it harder than usual to make a quick buck. What we’re seeing is punishment for not whispering secrets on the 18th hole.

  3. Apple is no longer secretive about their belief that China will be their largest market. So, what about the 67% market share that China Mobile has and Apple’s upcoming deal with China Mobile?

  4. JNJ is trading at PER of 22. Apple is at 9. Samsung Electronics is at 9.76. IBM is at 12.95 PER. The market is just not in to mobile phones right now. They can’t comprehend the size of the market and they sure as hell can’t comprehend the new innovations that are on the horizon. They just don’t get it. On the other hand, Apple needs to stun the world this year. I have faith that that is the case and hope to hell that short selling will become a thing of the past.

  5. MDN’s Troll Poll is interesting. We now have documented proof that at least 6% of the people (category: never) visiting this site are either idiots or Apple-haters, as well as potential posting trolls. Roughly 1 out of 16 sounds about right.

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