Apple Results confound analyst expectations yada yada

Well a monkey with a free daily chart from Silicon Alley Insider.

“CUPERTINO, California—July 21, 2009—Apple® today announced financial results for its fiscal 2009 third quarter ended June 27, 2009. The Company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share. These results compare to revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share, in the year-ago quarter. Gross margin was 36.3 percent, up from 34.8 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.”

From Apple’s website in wake of quarterly results announcement.

Cue headlines, ‘Bucking recession’, ‘Steve Jobs is back’, ‘Analysts react positively’ etc etc. Why do the Analysts do such a crummy job in the first place.

Yesterday, I suggested this would happen simply as Wall Street seems to consistently underpredict Apple results to make sure they can celebrate when the go over.

“As this chart shows, since December 2006, Apple’s EPS has topped guidance by an average of 39%. Revenue has been topped by 7% on average. Makes you wonder why although a stock that consistently outperforms the market expectations cannot be bad for trading volume in today’s world.

This highly scientific analysis suggests that EPS will be$1.36 with $8.35 billion revenue.”

My suggestion came from Silicon Alley Insider who made a note of the average underestimate of Apple results by over past 4 years. I applied this number to consensus forecasts.

  • $ 1.36 forecast EPS vs $1.35 actual.
  • $8.35 billion forecast revenue against $ 8.34 actual .

A lot closer than most of  the analysts. I still think they get it wrong as they are part of the hype machine, not because they are dumb.,

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