Apple slips, moneymen pounce
Quarterly financial results miss projections
Apple has released its financial results for its fourth fiscal quarter, and in doing so it handed conservative Wall Street prognosticators a rare win: Cupertino failed to meet or exceed analysts expectations for the first time in many a moon.
On Monday, Fortune averaged a number of independent analysts's predictions and came up with a healthy earnings-per-share forecast of $8.88. Citigroup bumped its estimate of Apple's EPS from $8.14 to $8.54.
Far less optimistic, however, was the Thomson Reuters estimate, which is based on the considered opinions of 46 institutional analysts. As reported by Yahoo! Finance, those worthies predicted that Apple's earnings per share would come in at $7.28.
Apple's actual earnings per share for the fourth quarter, which ended on September 24, was a mere $7.05.
In addition, Thomson's analysts' consensus on Apple's earnings for the quarter was $29.45bn. Cupertino slipped there, as well, with actual earnings of $28.27bn, which resulted in a quarterly net profit of $6.62bn
Don't get us wrong – Apple is far from slipping down the crapper. In fact, when compared with the year-ago quarter, which had revenues of $20.34bn and net profits of $4.31bn, these numbers are positively rosy.
But when compared with analysts' expectations, they're a disappointment.
We're betting that Apple's missing the Street's projections may have been due to depressed iPhone 4 sales in the run-up to the iPhone 4S's introduction – and the fact that four million of the new handsets were sold during its first weekend of availability indicates that there was, indeed, quite a bit of pent-up demand.
But Wall Street isn't happy: Apple's stock dove by over 6 per cent in the immediate aftermath of the earnings announcement.
The moneymen are merciless. To twist a baseball metaphor, in the stock game you're only as good as your next at bat. ®
Further proof that analysts are idiots
Y/Y profits up 85%, new Q1 phone has sold 4M in one weekend, SELL, SELL, SELL!
Wall Street is a respectable casino.
The change of the stock price on wall street will do nothing to how Apple runs. Wall Street is simply using announcements about Apple as a way to build interest to increase the volume of trading of gambling markers whose values are associated to the company as the company was the organization who initially issues the gambling markers.
For companies that are SO DAMN HUGE that even a billionaire can only own one or two percent of it if they risked their entire family fortune on it and even huge companies can't own more than maybe 20% if they bankrupted the rest of their ventures to do so, the share has absolutely no impact over the control of the company. Apple DOES NOT need more cash any time in the foreseeable future and therefore, trying to hype he share does nothing for the company. This is because the only impact the share value can have on a company is if the company is hoping to dilute the share base and offer more shares to raise funds for a venture.
So... for the most part, the Apple share has absolutely nothing to do with Apple. Gamblers trading at the Wall Street casinos just simply use information released by or about Apple to increase the buzz on the share. If Apple were to get delisted from the stock market tomorrow, it would have little impact on the company itself.
Remember that there are only a few minor differences between Wall Street and a casino in Vegas.
1) People know that the gamblers in Vegas are in fact gamblers.
2) Alcohol use at a Vegas casino is promoted and often free. At Wall Street, it's done in the bathroom and behind closed doors or during celebrations. However in both places, there are places to get really drunk really cheap nearby after losing your ass at the tables.
3) Vegas casinos don't impact the price of milk and food for your babies as the idiots gambling on food in Wall Street does.
4) Vegas casinos are controlled by more respectable management.
5) Vegas has rules to stop people from cheating much quicker. Things like counting cards and using computers is not allowed.
6) The gamblers in Vegas tend to gamble using their own money. Gamblers on Wall Street tend to gamble using other peoples money and far too often the savings you placed in the bank to keep safe.
7) Gamblers in Vegas can't place bets like "If this one wins, gamble this much next on the other" they have to manage that manually. So, it's not like Wall Street where you leave it all up to a computer to make millions of transactions a minute where if the logic is slightly off or there's a glitch in the system millions are lost by accident.
Wall street has absolutely nothing to do with investing. Wall Street is about gambling. Investors don't need the ability to make trades at a seconds notice. Proper investors make proper loans to companies they believe in or need and don't sell out just because the curve of a line changes. Gamblers (wall street guys for example) gamble on anything and everything. They gamble on truck loads of wheat and when they get too expensive to sell, the truck full of wheat actually rots and the price of the other guys truck goes up because of lack of supply.
Screw the analysts and screw the stock traders.... I'm praying for a major market collapse. I'll live in a tent and grow food in the yard and feed my family while those guys and their families starve to death. I pray they take the lawyers and politicians that let it get like this with them.
Fool me once...
When did we start trusting the economic analysts again? I must have missed that memo.