Apple reported its quarterly earnings earlier this week and the results were lower than expected. This miss was widely reported and Apple’s stock took a hit dropping from above 420 before the announcement to under 400 on Thursday afternoon. But whose fault is this negative financial report? Is it Apple’s failure to perform this past quarter or analyst’s overenthusiastic predictions that led to this uncharacteristic stumble.
According to Fortune contributor Andy Zaky, this foible is only a minor blip created by analysts whose predictions were off the chart. Zaky points out that Apple, in the past, has reported revenue that was about 12-18% above guidance. Analysts used this historical information and issued a consensus estimate that was 5-10% above guidance. That’s how it worked. Analysts would predict on the lower side, Apple would earn on the higher side and life was good.
This past quarter, though, analyst estimates had crept up to 18.8% and Apple’s reported earnings were 13%. Though Apple’s earnings fell within its normal 12 to 18% range, analysts got ahead of themselves and overestimated Apple’s performance. And it’s their own fault says Zaky. Apple repeatedly warned analysts this was going to be a transitional quarter, but analysts failed to listen.
[Via The Loop]
Apple’s earnings “miss” more an issue with overzealous analysts originally appeared on TUAW – The Unofficial Apple Weblog on Thu, 20 Oct 2011 17:45:00 EST. Please see our terms for use of feeds.
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