A guide to Apple's guidance
How to make sense of the forward-looking statements in next week's earnings report
If history is any guide, traders will reward or punish Apple's (AAPL) shares in after-hours trading Monday based not on the quarterly earnings it reports, but on what the company says about the quarter to come — which will almost certainly be disappointing.
You would think by now that Wall Street had figured out that Apple guides conservatively — which is to say, it low-balls its earnings and revenue numbers for the coming quarter so that it can blow them out of the water three months later.
But in case it hasn't, Piper Jaffray's Gene Munster on Thursday issued his quarterly guide to Apple's guidance, in which he tries to predict — based on past performance — precisely how much below (or in rare cases, above) the Street's expectations we can expect Apple's predictions to fall.
The charts on which he bases his estimates are pasted below the fold. Bottom line: Munster expects "a typical Apple guide," with the mid-point of its December earnings-per-share guidance around $1.68 (12% below the Street's $1.91 consensus) on revenues of $10.98 billion (4% below the Street's $11.44 billion).
Below: Munster’s spreadsheets for the past 13 quarters of earnings and revenue guidance.
[Follow Philip Elmer-DeWitt on Twitter @philiped]
With all this jabbering, will Apple even see a 5% pop after earnings? Or do these numbers mean nothing to investors?
Toss in the GAAP v. non-GAAP will-they-or-won't-they and it should be an even more interesting call this quarter. Day traders will have fun next week, but I'm going to sit it out. I like the long-term trend.
this whole earnings and company guidance event is so bogus.. analysts will upgrade, downgrade and make predictions on the stock price. it amounts to stock manipulation and should be discontinued. what should anyone care what john doe from xyz securities thinks about apple? if he loves/hates it… let him send out a personal note to his accounts. the same goes for the flip side. i hope one day this whole practice goes away.
Great to see these numbers laid out like this! Even with this, I'm really not sure at what point apple's guidance actually is seen as disappointing the street. Do all analysts match Gene and publish the 2nd number (what they expect apple to say they will earn next quarter as opposed to what the analyst thinks they will earn). If they do, aggregating that would be fabulous!
Thanks for considering ped!