Apple Stock Down 10% in After Hours Trading Amidst Concerns of Flat Growth

[MacRumors]

After reporting record-breaking quarterly revenue and profit earlier today, Apple's stock has taken a 10% tumble in after hours trading. Apple posted a $13.1 billion profit for the quarter this year compared to a $13.06 billion profit in the same quarter of last year, yielding flat growth year over year.

The flat growth, as pointed out by Apple, is largely because manufacturing costs have risen, even as revenue has risen 18%. The New York Times notes that analysts were worried that about Apple's profit margins, even after Apple warned that a significant overhaul of its product line would mean high manufacturing costs in the early lives of the products.

The results arrived with an unusual level of anticipation, even for a company as high-profile as Apple, because of anxiety among some investors about Apple's ability to sustain its growth and create new hit products. Apple's stock has lost about a quarter of its value since September, erasing more than $170 billion of its market value.

Business Insider notes that even though Apple's holiday quarter in 2012 had a week less than it did in 2011 that sales growth still wouldn't be at the point that it was.

Apple's 10% stock decline gives it a current market cap of $463.49 billion and a loss of nearly $50 billion in market capitalization from worried investors. Despite analysts' and investors' worries of year-over-year growth, The Wall Street Journal's Tom Gara notes that Apple's losses in market cap today were roughly equal the value of two Research in Motions and two Nokias.

Article Link: Apple Stock Down 10% in After Hours Trading Amidst Concerns of Flat Growth

[shanmugam]

no need to worry, it will be back up tomorrow around 10 or 1am

[Moshe1010]

I knew I had to buy some put options

[parapup]

Apple is becoming Microsoft - or at least that's the fear. They sell a ton of their cash cow products and make good money - but that's just resting on their laurels. Where the hell is any innovation and disruption? People respect Apple for exactly that. Making profits on cash cows - that spot is for Microsoft.

The thing is they will sell some more iPads and iPhones but then when that's saturated they will badly need disruptive new product or at least leaps and bounds improvements to existing ones. And there are no winds of that for past couple years and counting.

[iphone495]

The Law of Large Numbers really does apply to EVERYTHING.

[goobot]

Apple stock price is great, but I knew it would never get to 1000$ Why people even a acknowledge analysts is beyond me.

[TMar]

Originally Posted by shanmugam

no need to worry, it will be back up tomorrow around 10 or 1am

Who trades at 1 am?

[swester]

So glad I sold out at around $680. Too bad I didn't short on the way down, too.

The bottom line is that Apple's growth is evolving now. That exponential upward momentum was IMPOSSIBLE to sustain. That doesn't mean the stock is headed to the doldrums...it just needs to take a refresher and expectations have to be adjusted.

[1Alec1]

Originally Posted by goobot

Apple stock price is great, but I knew it would never get to 1000$ Why people even a acknowledge analysts is beyond me.

Analysts are typically wrong except when, in cases like these, they themselves affect the price to match the prediction. It's stupid.

[HiRez]

Despite analysts and investors worries of year over year growth, the Wall Street Journal's Tom Gara notes that Apple's losses in market cap today roughly equal the value of two RIMs and two Nokias

Don't you mean "Because of analysts and investors worries..." ?

[pipa]

This stock is a steal at this price. If/when apple attacks the TV market it is going to take that company into another stratosphere. Just imagine selling millions if tv's at $2,000 to $3,000 a set. I know ill be a day one buyer. And trust me when Steve was alive he said that he cracked the tv and knows what we need. Just remember in 07 when he cracked the cell phone what happened. With apples ecosystem in place and icloud a TV is the last piece of the puzzle and the possibilities of what can be done is incredible. FaceTime, iMessage,apps made for the set, safari. It's going to be amazing.

[BruiserB]

Time for Apple to buy back AAPL! This was hinted at on the call.

Can they buy their own stock without repatriating the money? That is can they buy the stock in whatever countries the money is currently in to avoid the taxes of bringing it home first?

[boccabella]

It didn't matter what Apple reported today, they could have announced a cure for cancer and Wall Street would have sold off the stock.

[1Alec1]

They're worried about the derivative of the derivative of the profits as a function of time being == 0. Not only is the bar now set lower for Apple, but the price of AAPL is set lower, a good point to buy.

[CausticPuppy]

Investors will be gobbling up AAPL tomorrow morning if it opens at $450.

[monkor]

Relax, folks.

[Chupa Chupa]

By "concerns of flat growth" Wall Street means it has lack of faith Tim Cook can successfully launch the next big thing like Jobs could. Cook's tenure so far has been less than steller. In fact, it's almost HP-like.

[Rogifan]

I'm confused. Didn't the stock end the day up? The 10% drop was in after hours trading. How so we know it will end the day tomorrow down 10%? It could be more, but it could be less too. So can we really say they've lost $50B in market cap?

[CausticPuppy]

Originally Posted by boccabella

It didn't matter what Apple reported today, they could have announced a cure for cancer and Wall Street would have sold off the stock.

They didn't reinvent the tv industry on the earnings call, so SELL

[1Alec1]

Originally Posted by Chupa Chupa

By "concerns of flat growth" Wall Street means it has lack of faith Tim Cook can successfully launch the next big thing like Jobs could. Cook's tenure so far has been less than steller. In fact, it's almost HP-like.

Even if Tim Cook does not launch anything big (and I can't see it happening), who cares? Apple's stock is undervalued, considering its profits. And its profits are growing. Apple doesn't even need to release anything big. It should just develop what it has and keep the innovation strong.

It's not like in the Jobs years when all the markets were ripe for Apple growth. Apple only had to compete with Sony Walkmans and Blackberries. Now, they have to compete with Samsung, Google, and themselves.

[Rogifan]

Originally Posted by Chupa Chupa

By "concerns of flat growth" Wall Street means it has lack of faith Tim Cook can successfully launch the next big thing like Jobs could. Cook's tenure so far has been less than steller. In fact, it's almost HP-like.

And yet Steve Jobs felt Cook was the right man to replace him.

[Karma*Police]

Sounds like a typical over-reaction by the street due to their myopia. I think the thing to look at is: T-Mobile/Metro PCS will come on baord this quarter which will help Apple take a commanding lead in the US, and iMac/iPad mini constraints should loosen. And it's only a matter of time before China's and Japan's largest carriers start selling the iPhone. That, in itself, would be a huge catalyst. That will keep the iPhone momentum going through 2014 and maybe even through 2015, during which point Apple may release their TV.

[1Alec1]

Originally Posted by Rogifan

I'm confused. Didn't the stock end the day up? The 10% drop was in after hours trading. How so we know it will end the day tomorrow down 10%? It could be more, but it could be less too. So can we really say they've lost $50B in market cap?

Nobody said anything about tomorrow's closing price. The thing I've always been confused about is why people can trade while the market is closed. The market might as well be open during after-hours, as I see it.

[grapes911]

I almost sold at $700. All I had to do was click one final button but I changed my mind at the last second.

[Bubba Satori]

Originally Posted by Rogifan

I'm confused. Didn't the stock end the day up? The 10% drop was in after hours trading. How so we know it will end the day tomorrow down 10%? It could be more, but it could be less too. So can we really say they've lost $50B in market cap?

As of now, yes, $50 billion.
Tomorrow it will be more or less, on paper.
I'm thinking we'll see a dead cat bounce as
bottom feeders pounce on a preceived buying opportunity.

----------

Originally Posted by grapes911

I almost sold at $700. All I had to do was click one final button but I changed my mind at the last second.

Do you still believe in the company? Think long term.

If yes, this might be a great buying opportunity.

Warren Buffet didn't become a billionaire daytrading