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After witnessing countless Apple Inc. (NASDAQ: AAPL) conference calls and earnings announcements in the last few years, I think it's safe to say that the hottest consumer tech company goes out of its way to underestimate quarterly numbers so it can "surprise" analysts with one blowout quarter after another. While other companies try to predict exactly how each quarter will go, Apple plays that game like it does consumer marketing: very slick and masterfully smart.But are those conservative guidance press releases slipping? Is Apple trying to be truer to what it really thinks it will make when upcoming quarterly guidance is released? That's the thought from some market watchers. Analysts picked up on the "undersell" tactic Apple has been using for quite some time and has fed clients the real deal on Apple's expectations.
But when Apple CFO Peter Oppenheimer gave out Q1 guidance back in October that seemed to be very aggressive -- with expectations of a $9.2 billion holiday quarter -- was he sandbagging or playing the standard line? Hard to tell. But if some analysts are correct, that expectation could be deceptive.
If Apple is really expecting more than $9.2 billion for the current quarter, then there's no limit on what the company can do in 2008, right? Consider Bear Sterns analyst Andy Neff, who expects a $9.67 billion quarter covering the holiday season, an EPS of $1.75 share and a stock price hitting $249 sometime in 2007. A three bagger is not so bad for a single year, eh? Apple shares began 2007 under $84 per share.
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Reader Comments (Page 1 of 1)
12-11-2007 @ 10:56AM
Michael said...
BW is only scratching the surface here - and not really understanding Apple at all. Apple doesn't 'spin' it's press conferences to manipulate the market in any way, shape or form - in fact - Apple earnings releases are run just like the company is - and so few seem to grasp this.
It's not complicated - in fact it's simple: Consistently underpromise and consistently overdeliver and customers will reward you with repeat business. Apple applies this exact same philosophy to their earnings releases. It's not spin - it's a conservative approach to always meeting and exceeding expectations. Imagine how Detroit and the big 3 would look like today if they had a mantra like that in their corridors every day!
By applying that philosophy to what Oppenheimer said one really begins to see how all of the various momentum building and expansion of the brand is paying off huge dividends.
12-13-2007 @ 5:21PM
BILL said...
249 DOLLARS IN THE YEAR 2007?
THEY BETTER HURRY UP. ONLY A FEW MORE DAYS LEFT.
PERHAPS YOU MEANT 2008?
BILL @NAPLES.
12-15-2007 @ 3:20PM
Neil Anderson said...
AAPL hit $200 briefly ... maybe you're not far off.
12-16-2007 @ 7:53PM
rt said...
Michael
You should have authored the article. Written like a master of the trade. Well done!
12-16-2007 @ 6:57PM
Daniel Murray said...
The analysts working AAPL are going to ALL be surprised with the $2. - $2.50 earnings posted for this quarter. If you want to read accurate analysis visit The Mac Observer site and check out the forums. These guys know AAPL and their record for the past few years shows them head and shoulders above the brokerages for accuracy. Apple has continued the lowball estimates but even the lowballs have to rise with greater earnings.
1-14-2008 @ 11:57PM
RICH BRULATO said...
I just keep "..laughing all the way to the bank!!! I bought AAPL at 80....you don't need an analyst or company exec to give you guidance on AAPL...just ask a 9 year old what phone they want and you will hear "an iphone.that's money in the bank!!!