Apple Misses Wall Street 4Q Expectations

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Apple didn't meet analysts' expectations? Apparently everyone is letting Wall Street down these days. ;)

Apple said it expects earnings of $11.75 per share in the holiday quarter, below the $13.87 per share it earned in the same period last year. Apple routinely lowballs its estimates, but this time the forecast was further from the analyst estimate than usual. Analysts polled by FactSet were expecting earnings of $15.59, on average.
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This is the beginning of the end of making cash hand over two fists and to a more reasonable hand over fist.

AMD fan comment: this happened because Apple is dropping AMD GPUs.
 
See, analysts fucked up again. They didn't do a good job and stock prices reflect their dumb ass shit. Company is punished because an analyst did a poor job.
 
Good let us hope this trend continues, and they loos even more money.
 
Typical unreasonable expectations of the market.
You can't expect a company to keep this level of growth year after year, especially when they are dependent on selling over-price trendy products.
 
In this economy where the GDP(Gross Domestic Product) is lower than in previous years then they have done very well. Analyst DO cause the problems by setting unrealistic expectations; every quarter and year have to be better than the previous quarter or year regardless of the general outlook. Some of them are aware of this and short the stock of certain organizations. It then becomes a self-fulling prophesy and they make bunches of cash themselves.
 
It is ridiculous that Apple can earn that much money per share and it still be "disappointing" simply because some analyst somewhere thought they should make even more. These analysts and their sometimes crazy expectations had a lot to do with CEOs fudging the numbers back during the accounting scandals that hit in the late 90s. A pox on their house.
 
delahaya said:
It is ridiculous that Apple can earn that much money per share and it still be "disappointing" simply because some analyst somewhere thought they should make even more. These analysts and their sometimes crazy expectations had a lot to do with CEOs fudging the numbers back during the accounting scandals that hit in the late 90s. A pox on their house.
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I think the problem here are the margins, not the revue and total profit numbers. They made a lot of money but their costs are very high and that's always disconcerting to investors especially as the economy recovers and their costs go up, along with increased competition that forces holding down product prices. With the stock at this premium of a price you really can't miss a beat with investors.
 
why the fuck are analysts overly bullish. 15.59???

they must be using a straight linear trajectory.

13.87 > 15.59 > 17.52 >> moon.
such bullshit.

or maybe they're using an exponential graph. :rolleyes:


I never thought iphone would be such a worldwide hit.
Even impoverished Africans will sacrifice their babies and food for an iphone. Really, a human phenomenon.
Apple can't even meet demand, and Foxconn workers already work 48 hours a day.
 
heatlesssun said:
Both eye popping numbers but the margins aren't so great.
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40% margins aren't great? Maybe if you are a pimp, but in consumer goods, it's phenomenal.

Apple stores are the most profitable retail business per square foot on the planet.

Lots of stuck on stupid here on HardOCP.
 
uclajd said:
40% margins aren't great? Maybe if you are a pimp, but in consumer goods, it's phenomenal.

Apple stores are the most profitable retail business per square foot on the planet.

Lots of stuck on stupid here on HardOCP.
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How is 8.2B in profit on 36B in revenue a 40% margin? Their margin actually dropped a bit over Q4 2011 which was their previous record profit quarter.
 
heatlesssun said:
You're talking gross, I was talking operating margin.
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Gross Margin was 40% but Operating Margin was 30.4%.

Revenue - Cost of Goods Sold = Gross Margin
$35.996 billion - $21.565 billion = $14.401 billion

R&D + Selling, General and Admin Expenses = Operating Expenses
$0.906 billion + $2.551 billion = $3.457 billion

Operating Income = Gross Margin - Operating Expenses
$14.401 billion - $3.457 billion = $10.944 billion

Operating Margin % = (Operating Income / Revenue) x 100
($10.944 billion / $35.996 billion) x 100 = 30.4%
 
It's well known what I think of apple - overpriced shiny trinkets.

Patent trolling aside - they know how to run a business. And if they are making 8.6 Billion dollars in a single quarter -- that's pretty god damn magical no matter how you look at it.

Just like oil speculators -- analysts saying it "should" be this or that do nothing but screw up the playing field. I'm pretty sure apple (or any company) couldn't give a rats ass what some piss poor analyst thinks.

The fact that they are turning amazing profit in an economic climate of uncertainty we are all familiar with... tells me on the business side Apple has their shit on lock, and anyone whos "disappointed" needs a kick in the teeth.

Seriously -- just imagine you come home from college, you made the dean's list, and got All 'A's and and a single "B" when everyone else is doing worse, would it be fair to get a lecture from your drunken drop out father how "you disappointed us".

Why not just bypass the analysts and say "We expect apple to make 4 gajillion dollars in Q1, and also have a moon base fully operational"

The higher ups at Apple are wiping their ass with 100 dollar bills -- do they really care what anyone thinks? I sure wouldn't :)
 
collegeboy69us said:
It's well known what I think of apple - overpriced shiny trinkets.

Patent trolling aside - they know how to run a business. And if they are making 8.6 Billion dollars in a single quarter -- that's pretty god damn magical no matter how you look at it.

Just like oil speculators -- analysts saying it "should" be this or that do nothing but screw up the playing field. I'm pretty sure apple (or any company) couldn't give a rats ass what some piss poor analyst thinks.

The fact that they are turning amazing profit in an economic climate of uncertainty we are all familiar with... tells me on the business side Apple has their shit on lock, and anyone whos "disappointed" needs a kick in the teeth.

Seriously -- just imagine you come home from college, you made the dean's list, and got All 'A's and and a single "B" when everyone else is doing worse, would it be fair to get a lecture from your drunken drop out father how "you disappointed us".

Why not just bypass the analysts and say "We expect apple to make 4 gajillion dollars in Q1, and also have a moon base fully operational"

The higher ups at Apple are wiping their ass with 100 dollar bills -- do they really care what anyone thinks? I sure wouldn't :)
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The market prices itself accordingly. Apples high $700 price was in reflectance that they would beat their estimate, meet growth estimates, have a competitive P/E, maintain margins, and many other market factors. The price started drop when doubt came out. The market is now finally correcting itself as they did not. The market will then reflect on the earnings, calculate probabilities on growth and then you will have new targets and future prices. If you believe analysts are the problem for the drop, they are also the problem for the inflation in the price. The market will now price itself at what they believe an 8.57 EPS $600+ dollar stock should trade at in this economy.

If the market viewed analysts expectations as out of line, we would see whats happening with AMZN right now, which is even after a total failure of an earnings report, their stock still shot up today. Yes, AMZN missed their analyst expectations yet has a 6% increase today.... What about AAPL... Wth AMZN, In your "example" this would be like your dad being disappointed with you, but yet you still went out and got a 6 figure job. If you still do well/market likes what you're doing, then it doesn't matter what the analyst think. That's one of the many parts of fun in company valuation - probability on earnings and the forthcoming analyst correlation risk.

As we see, the market views the expectations on AAPL as normal and in range, yet AAPL failed. As someone who is an analyst, do not blame the analysts. AAPL could have easily issued a guidance saying analysts are over marking us (which happens all the time with other companies), yet they didn't. Or if the market composition started to change the analyst would have changed their mark. Neither of those happened, and AAPL just issued statements against competitor products.

Yes their numbers are all good but at largest company in the world and $600+ share valuation they better be damn good and perfect in every ranking. At what value would you care about their operations, even if they are billions? 1k a share? Remember the valuation here, this is not a penny stock. This is a high three figure stock BECAUSE the market viewed them as getting that moon base. So in other words yes the markets $700 dollar price was in expectancy of the moon base. If you didn't believe a moon was coming, then you shouldn't have invested at 700. The current $600 price is set on expecting a certain goal in the future as well. Examples - YUM's current price is set on their expansion into China and Africa. Even if the miss everything, such as they did in June, as long as stores are opening in emerging markets, the market will still buy them up. AMT was hemorrhaging money during the real estate collapse and missed estimates by as high as -120%, but as long as investors saw them moving into South America, the market didn't care about them missing analyst goals, even as high as -120%.. With AAPL being so large, many investors place those goals on a handful of fundamentals rather then set operations.

In other words, don't blame analysts. If you must blame someone, blame you, the investors, for believe that the company would continue to grow at the current rate. Simplify equity ownership as low as possible -> You buy a share for a ownership of earnings, you want capital gains so you want to sell that share at a higher price, if earnings aren't increasing at a high enough rate, the stock will not grow. People were buying AAPL at $650-$700+ expecting their earnings to grow so they could get the capital gains, correct? When the news came out that they didn't grow, shit hit the fan. AMT could miss and not have anything happen because investors believe expansion to South America would still bring in higher growth in the future, same with YUM in the examples I used. AAPLs tentacles are already everywhere with no new growth spurt area in sight, as such the fundamentals of their current business structure matter more. Simple as that. No evil analyst hate, no nothing.
 
Would somebody explain how the stock market works?

The way i understand it:
You buy 1 piece of stock for $10
Stock price goes up 200%
You sell your stock for $20 and earn $10 profit

Is that the only way you'll earn something at the stock market? Because if it is, then even if the company earns 10billion, if it still earns 10 billion year after year, then i'm not really getting anything out of it. If it was earning 10billion when i bought in, and it went down to 8billion, it may still be earning more than other companies, but as a stock investor, i've lost money.
 
You can only buy so many iPhone/Tabs before you say good enough.
 
Apple has hit the economy wall. People are wising up.
 
Wonder how many people here actually followed this on earnings day. I watch their earnings released, it dropped 30 and then it rose back and finished green in the AH. Ridiculous. What did them in was weak ipad sales. They're even introducing the ipad4 and now the mini. Too much congestion I'd say. It's absolutely bearish right now but then again, the whole tech sector is. The only true anomaly is AMAZON. Defies gravity even with crap earnings.

@Sly As an investor, one would shoot for an ideal return of 10-20%. Now go to your bank account: Is it gaining >2%? Stocks are risky and greed kill but when you say, I bought at 10, I sold at 20. That double up man. If I put 50k in, I walk away with 100k (50k gain). That's not too shabby.
You're right though, if a stock exhibits flat growth, it might be a signal to leave and sell.
 
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