Apple 2.0

Covering the business that Steve Jobs built

Apple's blow-out quarter: Once again, the Street blew it

January 25, 2012: 12:15 AM ET

Humiliated by a bunch of bloggers, amateur analysts and assorted day traders

Click to enlarge.

With revenues that grew 73% and earnings that more than doubled, Apple (AAPL) proved Tuesday that the fourth quarter results that so disappointed Wall Street last fall were a fluke. The company that Steve Jobs built is still that rare beast in American business: A $400 billion giant that acts -- and grows -- like a start-up.

Tuesday's results also revealed another fluke: The shellacking that our team of independent analysts suffered in October at the hands of Wall Street analysts with some of the worst track records in the business. (See Apple earnings smackdown: The bloggers got clobbered.)

This time, as evidenced by the preponderance of Wall Street blue on the bottom of the chart at right and the dominance of Indie green at the top, the order we had documented in more than half a dozen consecutive quarters was restored.

Once again, the Street blew it. And although even the most bullish independents were surprised by the strength of Apple's Q1 2012 results, at least they were in the ball park.

So kudos to Navin Nagrani, the Chicago real-estate executive who won this quarter's Earnings Smackdown with the best revenue and earnings estimates of the 50 analysts we polled.

"Feels like winning an Oscar," he wrote when I told him. "I'm such an Apple geek."

A hat tip also to:

  • Asymco's Horace Dediu and Sterne Agee's Shaw Wu, who nailed the Mac number. (Dediu is also No. 1 when all the categories are averaged together.)
  • Gabriel Dubois of AAPL Independent Analysts, who came in closest on both iPhones and gross margin
  • Dennis Hildebrand of Apple's Gold and Luke Kittell of the MacObserver's Apple Finance Board, who nailed the iPod number
  • And Gregg Thurman, also of AAPL Independent Analysts, who missed narrowly on iPads

I'm not sure what to say about Gabelli's Hendi Susanto, who had the worst estimates for revenue (off by $11 billion), EPS (off by $5) and iPhones (off by nearly 12 million units) as well as the second worst estimates for iPods and iPads. As near as I can tell, he published his numbers on Oct. 19, just after Apple's big miss, and never looked at them again.

But he's got plenty of company in the pink and red cells at the bottom of the color-coded chart below, including (but not limited to) Hudson Square's Daniel Ernst, JMP Securities' Alex Gauna and, once again, Morgan Stanley's Katy Huberty. For analyst who writes such smart Apple reports, she publishes some pretty dumb numbers.

Below the fold: The annotated spreadsheet.

Click to enlarge. Best estimates in bright green, second and third in light green. Pink is bad and bright red worst of all.

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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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