Like everybody else on the planet, I knew Apple (AAPL) would beat their earnings estimate, and likely by a decent amount. Also, like the rest of humanity, I was floored when I saw the actual number flash across the screen. I could almost see the smirk on Steve Jobs’ face as the headline hit the wires.
Amazing Quarter
Apple earned $7.79 per share, which left the consensus estimate of $5.87 in the dust. This type of beat for the second largest company in the world has to be unprecedented. Revenues soared 82% to $28.6 billion, blasting away this estimate by almost $3 billion. China provided a big boost to results as the company sold close to $4 billion worth of iPhones there.
Why does the company even bother giving guidance? They laughably lowball it every quarter and then produce incredible results. For next quarter, management said that earnings would come in around $5.50 per share, which is almost a dollar below where analysts currently are. Somebody should tell them that this lowering expectations game is getting old.
Speaking Of Analysts
Is there a tougher job than being an Apple analyst these days? If I were their boss, I would tell them to add at least 50 cents per share to whatever estimate they come up with. I don’t understand how all of them can always be so dramatically wrong every single quarter. It is their job to be accurate, not lowball the estimate so the company can trounce it. They must be tired of looking foolish every three months by now.
Expect massive upward EPS revisions in the next few days, which might even make the stock cheaper even as it flirts with the $400 level. That’s the great thing about a company that blows away numbers: the stock can actually get cheaper as it soars because the price can’t keep up with earnings growth.
It’s hard to believe the stock hit $310 intraday just in the past few weeks. That is a lucky guy who scooped up those shares. I wouldn’t be at all surprised to see this stock at $500 sometime in the next year. Don’t be shy about buying at any price below $400.
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