Roundup of Analyst Expectations Ahead of Q3 2012 Earnings Call

[shamino]

As usual, Apple will exceed expectations. Maybe dramatically so. As usual, the stock price will fall anyway.

I see this with a lot of successful tech companies.

The company claims that they will do well. The analysts say "no, you'll do much better than that" and announce something impossible to achieve. The hype from the analyst report inflates the price. Then the real numbers are reported, which are better than the company's prediction but less than the impossible analyst-prediction, and all the people who bought into the hype sell, making the price drop.

It looks surprisingly like a pump-and-dump scam, but it's really difficult to prove that if the analysts aren't in some way related to the company they're hyping.

 

[pgiguere1]

As usual, the stock price will fall anyway.

Is this really what usually happens?

I remember it went down the time iPhone sales were below those of the same quarter the year before (mainly because of the delayed launch of the iPhone 4S compared to other iPhone launches). I don't remember the other times though.

 

[rydewnd2]

You don't get killed until you sell. If you can't tolerate market fluctuations you certainly shouldn't invest in individual securities. You might want to look at mutual funds or bonds for safer, more reliable (yet much lower yielding) investments.

I share the sentiment. I'm just hoping that iPad sales are enough for the 7% jump, hell, I'll take 5%. I'm planning on making an exit this quarter after the dividend but I might be out of AAPL as soon as tomorrow regardless of earnings and dividends due to overall market conditions, I've been getting killed the last three days!

 

[cvaldes]

As usual, Apple will exceed expectations. Maybe dramatically so.

As usual, the stock price will fall anyway.

Investors are weenies.

 

[BC2009]

As usual, Apple will exceed expectations. Maybe dramatically so.

As usual, the stock price will fall anyway.



Apple keeps reporting record quarter after record quarter, yet the stock treads water well below its high of $640 and sits at a laughably-low P/E of 14-ish where Amazon is at 187 ( ).

If you recalculate P/E ratio as "forward P/E" based on this year's earnings then you have to expect a correction some time around fiscal Q1 2013 -- if not then the P/E ratio for AAPL will be around 10. So the price has to correct at some point. If you subtract cash-on-hand from stock price the P/E is even much lower. AAPL should be on an upwards revenue and profit trend for at least 18 more months if not 36 months as the markets they compete in grow in size (e.g.: more mobile phones become smartphones world-wide and more PC's become tablets). Only once the markets mature will we see a decline in margin in Apple's products and by then Apple will likely shift to new products in markets that are emerging.

Amazon's P/E is a joke and is probably a poor comparison. The boat has long sailed for anybody looking to invest in Amazon. Better comparison for Apple's P/E is against a company with similar product offerings like Microsoft. A healthy AAPL P/E ratio should be around 18 to 22 in my opinion. If it drops to 10 once they start calculating off 2012 earnings it could correct to double the price stock. Then if the price of the stock continues to track earnings at a healthy P/E ratio (considering cash-on-hand) it could be on an upward trend until it hits about $1500 to $1800 in the next 18 to 36 months. That's about as far in the future as I am willing to predict, but that is my guess.

This is why I am an AAPL investor (at least for the next 18 to 24 months or so).
Watching the day trader effect on day-to-day AAPL stock price will only drive you insane.

 

[Reason077]

As usual, Apple will exceed expectations. Maybe dramatically so.

As usual, the stock price will fall anyway.

Apple is expected to exceed expectations. If they exceed expectations by less that the expected amount, that's when the stock price falls. If they exceed expectations by more than expected, the stock could rise exceptionally.

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Amazon's P/E is a joke and is probably a poor comparison. The boat has long sailed for anybody looking to invest in Amazon.

Not sure I agree with this. I'd buy AMZN on a dip.

Amazon's earnings are depressed because they are pouring so much money back into R&D. On the technology side, they really are one of the best companies in the business. Things like Kindle and AWS are market leaders and growing fast.

Obviously their margins are never going to compare to Apple's, but their stock commands a higher P/E because of the growth potential. Amazon's in a position where it'll be fairly easy for them to double/triple/10X their profits in a few years. Not so easy for Apple to do that.

 

[Michael Scrip]

I find it pretty hard to believe that the 13" MBP is the top volume model. You almost never see them, where as a lot of people have the 15". The 13" Air, on the other hand, is extremely popular.

Damn... where do you live that you see so many $1800 laptops?

 

[iMikeT]

You don't get killed until you sell. If you can't tolerate market fluctuations you certainly shouldn't invest in individual securities. You might want to look at mutual funds or bonds for safer, more reliable (yet much lower yielding) investments.

I'm not a traditional investor. I consider myself somewhere between a day trader and a very short-term investor.

 

[drewisanapple]

Damn... where do you live that you see so many $1800 laptops?

I see more 15" out there right now, during college season it's 13" pro models. But in my city creation is done with 15" models.

 

[Michael Scrip]

Not sure I agree with this. I'd buy AMZN on a dip.

Amazon's earnings are depressed because they are pouring so much money back into R&D. On the technology side, they really are one of the best companies in the business. Things like Kindle and AWS are market leaders and growing fast.

Obviously their margins are never going to compare to Apple's, but their stock commands a higher P/E because of the growth potential. Amazon's in a position where it'll be fairly easy for them to double/triple/10X their profits in a few years. Not so easy for Apple to do that.

I dunno... would you invest in Amazon if they can't even tell how many of their products they sell? Isn't that kind of an important metric?

For years... Amazon was a seller of other people's stuff. But recently they started selling their own hardware with the Kindle.

But I don't think they're even confident about that... since they won't ever talk about Kindle numbers.

Do you just trust them?

Then again... Samsung stopped reporting numbers too... and they're doing just fine.

 

[iMikeT]

AAPL missed and is down. Currently trading ~575 aftermarket.

Correction: ~565 aftermarket.

 

[hcho3]

Analysts need to drink some cool aid and wake up...

37 billion dollars in revenue? You crazy?

Apple made 35 billion in revenue and sold 26 million iphones. Stop with this madness numbers. Apple is doing fine.

 

[Reason077]

Ouch.

Like I said earlier, Apple is expected to exceed expectations. If expectations are not exceeded, a drop can be expected.

 

[Dmunjal]

28% growth YoY on iPhones is not that great compared to the numbers they were putting up before. Maybe just a lull before the iPhone 5.

 

[cvaldes]

LOL, hell just froze over, Huberty is the closest analyst.

 

[Reason077]

28% growth YoY on iPhones is not that great compared to the numbers they were putting up before. Maybe just a lull before the iPhone 5.

Yeah. People delaying upgrades for the iPhone 5, but also competition from Android starting to bite.

iPad sales look pretty strong though.

 

[GfPQqmcRKUvP]

Apple missed big. Independent analysts were way off on this one.

 

[Dave00]

Yikes, big drop. Another earnings miss. I think what's being missed by analysts is that AAPL earnings are becoming more cyclical, as consumers become more savvy as to when the new iProduct comes out. It will continue to be weak next quarter as we await the iPhone 5 - then they'll blow it out of the box again in the holiday quarter. Just wish I'd sold some ahead of time to buy it back now. Important thing to look at is year-over-year, not sequential - iPhones up 28%, iPads up 84%. Eventually, they'll have to return to a normal multiple of the P:E. Right now, it's priced as if the market expects sales to actually decrease - and significantly - the next 12 months. That doesn't seem likely.

 

[iMikeT]

Yikes, big drop. Another earnings miss. I think what's being missed by analysts is that AAPL earnings are becoming more cyclical, as consumers become more savvy as to when the new iProduct comes out. It will continue to be weak next quarter as we await the iPhone 5 - then they'll blow it out of the box again in the holiday quarter. Just wish I'd sold some ahead of time to buy it back now. Important thing to look at is year-over-year, not sequential - iPhones up 28%, iPads up 84%. Eventually, they'll have to return to a normal multiple of the P:E. Right now, it's priced as if the market expects sales to actually decrease - and significantly - the next 12 months. That doesn't seem likely.

Agreed.

 

[LagunaSol]

Watching the day trader effect on day-to-day AAPL stock price will only drive you insane.

Amen. I've been long on AAPL since 2001 (wish I had bought more, of course) and have finally settled into not stressing out about the daily ebb and flow (which this stock has in spades, more than any other stock I've seen), but one can't help but watch the big drops and feel anxiety, even though I have no intention to sell for years.

 

[pubwvj]

This will be considered a big "miss" for Apple

Only to fools. Microsoft loses money. Apple has 8.8 BILLION dollars in PROFITS. No other computer business is doing well in this weak economy yet Apple is raking in the profits. That's good news. Only a fool would think otherwise.

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As usual, Apple will exceed expectations. Maybe dramatically so. As usual, the stock price will fall anyway.

The stock market is pretty silly. If you really want to make money then buy yourself a Mac and create things or do services with it. Your return will be orders of magnitude better than if you buy stocks.

My stock is out grazing my other asset.

I sell pork bellies. For real.

 

[mr0c]

LOL, ace (*cough cough*) ANAL-yst Huberty is lowballing this one, coming in at the bottom.

As Colbert would say, it looks like Huberty "NAILED IT":
35.08 vs 35.0
9.45 vs 9.32

Closer than any of the other clowns ...

 

[techwhiz]

Apple Didn't Miss

Apple gave a reasonable estimate of revenue and sales.
They said they would not make as much money this quarter as they did the last. They said $34 Billion and they beat that number by $1 Billion. Analysts seemed to think they know more about Apple than Apple does. They had numbers as high as $42 Billion.

What a bunch of tools...............