Apple shares slide on analyst warning
Shares of Apple Computer continued their downward spiral on Wednesday, falling $2.24 or 4.03 percent after one Wall Street analyst warned that the company is likely to guide below the Street's consensus for its fourth fiscal quarter.
"We expect Apple to guide revenue below consensus of $5 billion, likely in the $4.6 - $4.8 billion range with earnings-per-share (EPS) of approximately $0.50 versus the Streetâs $0.52," Credit Suisse analyst Robert Semple told clients.
The analyst said he believes the Cupertino, Calif.-based company will use its fiscal fourth quarter, which ends in September, to reduce iPod inventories ahead of refreshed models that will debut in either September of October.
Apple's Q3
Apple, which will announce the results of its third fiscal quarter next week, is likely to announce solid gross margins of about 100 basis points (or 1 percent) above its guidance of 28.5 percent, Semple said.
"This is primarily due to the combination of further iPod component cost declines, specifically for NAND and HDDs, and a more profitable mix of Mac sales, with a slight offset due to slowing software sales," he told clients.
For the quarter, Semple expects revenue of $4.4 billion and EPS of $0.46, ahead of Apple's guidance of $0.39- $0.43 and the Street's consensus of $0.44.
The analyst expects overall Mac shipments will grow 16 percent quarter-to-quarter to 1.285 million units, which will represent market share gains as the company continues to roll-out its Intel-based Macs.
"We believe Apple shipped approximately 450,000 MacBooks compared to our initial estimate of 310,000," he noted.
On the other hand, Semple said the company's prolonged iPod product cycle will likely cause it to miss the Street's iPod unit estimates of 8.25 million by about half a million units.
"On a near-term basis, we expect the stock to remain highly volatile based on the short-term focus around the timing of upcoming product introductions and their varying degrees of success," Semple added. "However, longer-term we continue to believe the stock is attractively valued."
Credit Suisse maintains an "Outperform" rating on Apple shares with a 12-month price target of $90.
46 Comments
Being off 45% on their predictions of computer units shipped, I'd say this analyst doesn't know what the fuck he's talking about!
Telling us that Apple's stock is volatile is, well, a no-shit sherlock bit of info as well.
ROTFLMAO!
"Apple shares slide on analyst warning." I'm so sick of people dumping stock because someone says that a company isn't going to surpass the "Street's" estimate. Why the hell to do companies even bother with their own guidance if what is important is the "Street's" guidance? The share price tumbles because SPECULATION that the company, which has direct access to ALL of the information, won't hit a number that they NEVER SAID THEY'D HIT! Half the things the analysts say were pulled directly out of their asses, and investors cling to every stinky word. Where's the logic in the share price drop? Didn't they rate Apple "Outperform" with a price target nearly double today's stock price?
This is the analysts making themselves a nice buying opportunity before Apple blows away estimates next Wednesday. I think this may be the lowest you will ever be able to get Apple stock. This will give those analysts involved good bonuses when the stock reaches 90 after their company picked up large blocks at 53.
I totally agree.
It hurts even more b/c I recently put alot more money in AAPL. I was so confident that I would see nice returns. What I did not realize was that the market is controlled by idiots with warped logic. People with intelligence get hit the hardest b/c we can't lower ourselves to think like they do
"What Microsoft is going to make an MP3 player?...We are doomed" WTF there are dozens of competitors now and apple is fine. Besides the fact that there is still plenty of room for growth even if they lose some of the ratio b/c the mp3 player market is about 1/5 saturated. Meaning apple could easily double the amount of ipods sold even if they lose some market share. And most of all Apple makes alot of money on their computer sector which is showing signs of explosive growth (which will be confirmed next week with earnings). Mac computers are the next iPod complete with all the hype that drives up prices.
I just pray that the idiots realize this.