Apple 2.0

Covering the business that Steve Jobs built

Apple's blow-out quarter: The bloggers called it, the Street blew it

January 19, 2011: 8:05 AM ET

In the quarterly battle between outsiders and the insiders, it's the amateurs by a mile

Amateurs in blue, pros in peach. Click to enlarge.

This one wasn't even close.

In our ranking of the best and worst Apple (AAPL) analysts for Q1 2011, which lists them based on how accurately they predicted seven key numbers -- revenue, earnings, gross margins and unit sales -- the unaffiliated analysts (blue in the chart at right) took 9 out of the 10 top spots.

The bottom 20 spots were all held by professionals working for the banks and brokerage houses. Taken as a whole, the numbers they sent their paying clients were off by a margin (9.04%) more than twice as big as those generated by the guys who do it for free (3.94%).

They included some spectacular misses:

  • Needham's Charlie Wolf, who underestimated Apple's revenues by $3.73 billion and its iPad sales by more than 2 million units
  • Sterne Agee's Vijay Rakesh, who predicted that Apple would sell 7.95 million fewer iPods than they did.
  • Morgan Keegan's Travis McCourt, who missed Apple's earnings by $1.79 a share and its iPhone sales by 2.24 million units.

On the blogger side, special mention goes to:

  • Financial Alchemist's Turley Muller, who missed Apple's EPS by just one penny.
  • Traderhood's Nicholas Mihalache, whose estimate for Apple's revenue number was off by only 0.27% and who missed its iPad unit sales number by 0.76%
  • Apple Gold's Dennis Hildebrand, who nailed Apple's gross margin.
  • Apple Finance Board's Alexis Cabot, whose iPod estimate was off by only 60,000 units.
  • And finally to Patrick Smellie, also of AFB, who didn't nail any individual number, but who was close enough on all of them to take the No. 1 spot overall.

Below, our Earnings Smackdown spreadsheet, annotated to show the best three and the worst three predictions in each category.

Green: best estimate. Red: worst. Light green: 2nd or 3rd best. Pink: 2nd or 3rd worst.

See also:

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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