What to make of those pesky forward-looking statements in today's earnings report
Source: Piper Jaffray, Company reports
It used to be that traders rewarded or punished Apple's (AAPL) shares right after its earnings releases based not on the sales it reported for the past quarter, but on what the company said about the quarter to come. Apple tends to "guide conservatively," in the jargon of the trade, which Wall Street often interpreted as a disappointment.
But that pattern has been broken in recent quarters. In July, the stock popped in after-hours trading despite earnings guidance that was a whopping 16% below the Street's expectations. And in October, the stock tanked despite guidance that was 4% above consensus.
It turned out that Apple in July was sending a signal about the September quarter -- the one that didn't include the expected release of a new iPhone -- that Wall Street chose to ignore. For the December quarter, Apple told investors to expect earnings of $9.30 a share on sales of $37 billion, which for Apple was unusually optimistic. (Wall Street, of course, is expecting Apple to handily beat both its guidance and the Street's published consensus for Q1 2012 -- earnings of $10.08 on sales of $38.85 billion.)
What kind of signal will Apple send today for the March quarter? On average, according to Piper Jaffray's Gene Munster, Apple guides 10% below the Street's consensus on earnings and 2% below on revenue. Assuming that pattern holds, Apple's guidance this afternoon should look something like this:
Any deviation from that pattern will be closely watched.
Below the fold: Munster's spreadsheets recording five and half years of revenue and earnings guidance.
A big Q3 is a given. Just look at what the stock has done lately. But the devil is in the details
The Street has fallen back in love with Apple (AAPL). "Get ready for the return of the wow factor," J.P. Morgan's Mark Moskowitz told clients last week just before the stock put the finishing touches on a 28-day, $58.48 (18.5%) run that took it to $373.80 Monday afternoon, an MORE
Philip Elmer-DeWitt - Jul 19, 2011 7:48 AM ET
What to watch for Monday when the company reports its fiscal fourth quarter earnings
Apple's (AAPL) shares have been on a tear since late August, soaring nearly $75 (more than 30%) to close Friday at an all-time record $314.74.
Whether that proves to be the top of a long bull run or the start of an even bigger one depends on how investors react to the results scheduled to be released at MORE
Philip Elmer-DeWitt - Oct 18, 2010 6:53 AM ET
Analysts either don't believe Apple's revenue guidance, or they're deliberately low-balling it
Click to enlarge. Source: AAPLinvestors.net
Anybody who follows its earnings reports can tell you that Apple (AAPL) guides conservatively, under-estimating its forward-looking numbers to demolish them at the end of the quarter.
Only once in the past 23 quarters -- in the summer of 2006 -- did it miss its revenue guidance, by 0.7%. In the other 22 MORE
Philip Elmer-DeWitt - Jul 25, 2010 6:13 AM ET
How to make sense of the forward-looking statements in next week's earnings report
If history is any guide, traders will reward or punish Apple's (AAPL) shares in after-hours trading Monday based not on the quarterly earnings it reports, but on what the company says about the quarter to come -- which will almost certainly be disappointing.
You would think by now that Wall Street had figured out that Apple guides conservatively -- MORE
Philip Elmer-DeWitt - Oct 15, 2009 7:31 AM ETEvery morning, discover the companies, deals and trends in tech that are moving markets and making headlines. SUBSCRIBE
Receive Fortune's newsletter on all the deals that matter, from Wall Street to Sand Hill Road. SUBSCRIBE
Covering the digital giants of Silicon Valley and beyond, an in-depth look at enterprise companies, and the startups disrupting them. Written by Michal Lev-Ram and emailed twice weekly. SUBSCRIBE
Anne Fisher answers career-related questions and offers helpful advice for business professionals. SUBSCRIBE
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.95 | -0.16 | -1.97% |
| Microsoft Corp | 31.27 | -0.17 | -0.54% |
| Ford Motor Co | 12.28 | -0.25 | -2.00% |
| General Electric Co | 19.39 | 0.17 | 0.88% |
| Citigroup Inc | 32.36 | -1.00 | -3.00% |
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,938.67 | -27.02 | -0.21% |
| Nasdaq | 2,933.17 | -15.40 | -0.52% |
| S&P 500 | 1,357.66 | -4.55 | -0.33% |
| Treasuries | 2.00 | -0.04 | -1.96% |
.
