Apple's light guidance drives down stock
Posted
Jul 21 2008, 04:39 PM
by
Kim Peterson
Rating:
Apple's guidance can drive an investor crazy. The company is extraordinarily bold and confident except for four days a year, when it bats its lashes and coyly says that the next quarter, well, it'll just be OK. Then the actual results come around and poof, Apple beats out expectations with spectacular numbers.
It's a game we've gotten used to, but on days like today, when Apple's guidance seems particularly light, it gets confusing. Is Apple really going to have a tough quarter, or is it just toying with everyone again? Investors seem to be coming down on the tough quarter side, because Apple shares are down more nearly 10% after-hours to $149.97.
You wouldn't know it from the post-bell reaction, but Apple actually had a great June quarter, with Mac computers in particular seeing impressive growth. The company shipped 2.5 million Macs during that time -- 41% more than a year ago. IPod sales were up 12% to 11 million. IPhones were gone from stores for much of the quarter, which explains why only 717,000 were sold during that period.
The company handily beat analyst expectations on both sales and profit.
Here are the numbers: Revenue was $7.46 billion, up from $5.41 billion in the year-ago quarter. Analysts had expected $7.37 billion, and the company's guidance was $7.2 billion. On the profit side, EPS was $1.19, up from 92 cents a year ago. Analysts had expected $1.08, and Apple's guidance was $1.
For the current quarter, Apple said it expects revenue of only about $7.8 billion and EPS of $1.
Here's what some people are saying about the news:
Pacific Crest analyst Andy Hargreaves: The low forecast "is something they do every quarter. It shouldn't surprise people, but it does." (Bloomberg)
American Technology analyst Shaw Wu: "The quarter was actually quite strong. The guidance was conservative as usual and not totally unexpected. Given the jittery market, it isn't too surprising that its conservative guidance is being viewed as cautious." (MarketWatch)
Portfolio manager Michael Obuchowski: "The Mac is the primary reason we own Apple shares. For several quarters, we've seen an incredible acceleration in Apple's PC business." (Bloomberg)
