Apple’s record Q1 earnings fall on deaf ears

I am not a trader or investor of any note even in my wildest dreams, but I am a user and investor in Apple (albeit a VERY small one). Why? Because I use their product and believe in what they produce is quality that speaks to my needs, my life and lifestyle.

I bought Apple many, many years ago when it was in the low double digits (wish I had the money back when it was in the teens). I now have a 1000% increase in my initial investment. I have no plans to sell it and I may buy more for the same reasons mentioned above.

I have read all these comments with interest (and some dismay at the vitriol). While I cannot comment on the ups and downs of the Market with anything but curiosity, I have noticed an interesting historical correlation.

Every spring, as Apple launches the SF Mac World, investors eagerly wait for Job’s opening pronouncements and the annual projections that are soon to follow. It seems to me that on any year that Apple has not made an announcement of an amazing new product (like the Macintosh, like the iMac, like OS X, like the iPhone… doesn’t matter if you use them or even like them), their stock has taken a tumble. Doesn’t seem to matter what the actual numbers are because Apple has been doing well for some time and steadily growing. I think the market expects innovation and feels justified in punishing Apple (long a whipping boy for the media) for disappointing.

And to that the general disarray of the economy and greed and hyperbole of the Market and you have… business as usual.

Oh. BTW – Apple is at 137 aftermarket and going UP.

I bought my first shares of AAPL in 1985. Was I wrong? The company is stronger than ever, no debt to speak of, and a growing market share. If you are a true investor, you are LONG on this one, so fluctuations don’t mean beans to me.

Earth to readers, Apple sells worldwide. Although they have focused on the US market, and in Europe, they now have plans to open new “Apple stores” in China. I’m going to take a stab at locations, but I would bet… Beijing (12 million) for the olympics, Shanghai (14 million) for the huge international business opportunity, as well as Hong Kong (6 million). That’s population in ()’s. Wealthy, Urban, Influential Chinese population… so 3 stores, with access to 32 million new potential clients. I’d say they’ll make a LOT of money in the near to mid term.

Yes, China is eagerly awaiting the iPhone, iPod, and new Apple stores! I hear they are great in the USA.

C’mon people, read up on the topic then comment. Apple was priced for absolute perfection, and this is less than perfect. Oops, no China deal! Ouch, there goes a million Iphone sales!! Ipod getting more competition without DRM and those who know will switch, such as Google did to Yahoo. Mac’s will become a bigger virus target as sales are more to home users who are easier targets than corp networks. It’s a good company, I am not here to bash, but nothing like a monopoly.

Keep dreaming Zebracat. How many Vista machines were shipped in Q4 vs. how many Macs and copies of Leopard were sold? Vista a failure? Jobs is praying for a “failure” on the level of Vista. The delusion of the AAPL fanboys continues unabated.

Some one wake up Steve Jobs from this NEXT computer company inspired nightmare. Windows ME in 2000 was a disaster that had people going back to Windows 98! Apple grew in market share during that time to above 4% only to fall to a meager 1.8% in 2004. High end gadgets are not the way. The way is attack Windows Vista as an OS for new machines. Apple is using more or less standard PC parts these days and now needs to offer a version of the OS to the low and middle level PC makers to undercut Windows OS cost on new machines. For god’s sake Wal-mart was selling Machines with Linux on them to lower the price point this Xmas! With a failed Vista and a shrinking money supply now is the time to beat Microsoft at their own game by hitting low. The converts will quickly move up the ladder to buy Apple’s high end product later.

Raj, you are positively amusing! :) It is a shame that others as well as economic indicators do not share your passionate optimism for the time being…

You are correct that the current declines are an exaggeration of the current circumstances, but we are all human (emotional) after all.

“that’s why he can state the facts he does……HE DOES HIS HOMEWORK!!!!”

Yes, he certainly does his homework. Unfortunately, even his skills are not sufficient in this market because most of his picks are way down. But good old Jimmy blames everything on the Fed: if we had that rate cut months DOW would be at 15000 now, never mind that subprime mess!

Regarding Apple stock: some of you should stop whining. Remember what you were thinking when the stock was at 200? I bet it was I wish I bought the stock when it was at 130’s. So here’s your opportunity to buy. If you think it is still overvalued, then short it. You see, stock market will give you money for being right.

THERE IS NO RECESSION. HELLO BIRD BRAINS THERE IS NO RECESSION. WHY IS THIS FEAR AMONG PEOPLE. COME OUT OF YOUR NESTS AND SEE THERE IS NO RECESSION. HIGHER ENERGY PRICES HAS JUST CURTAILED AVERAGE AMERICAN PEOPLE FROM SPENDING ON OTHER GOODS AND SERVICES. SOME PEOPLE ARE JUST TAKING ADVANTAGE OF THIS FEAR AS AMERICANS ARE TOO WEAK AND EASILY INTIMIDATED AND VULNERABLE AND SOME BIG SHARK IN THE STOCK MARKET IS JUST HITTING THE RIGHT SWITCH.
THERE IS NO RECESSION.

Apple is a good company…I would say that the investor would be well advised to “buy” at $125/share. That is about what it is worth.

Gentlemen, I’m encouraged that others also find the stocks recent movements ‘remarkable’ given AAPL’s performance and outlook. It is of course in the interest of those compensated with stock to ensure that sufficient upside in the stock remains at certain times of the year to leverage the difference between grant, and (exercise)/sell.

An investigation seems to be warranted given the indications of manipulation by larger holders of the stock, recession or not.

I’m sorry, but I don’t understand how an increase in sales of of 29% can prompt a stock’s price to fall! Okay, so they project earnigs of “only” $0.94 instead of a “projected” (by whom?) $1.09. So what? Isn’t that great?

how did i know you weren’t able to post actual facts on how you concluded apple at 200 in two months….

you’re the typical hope and pray money spender….you’re not an investor…

don’t let the emotions run your mouth like you do your investments….

i GUARANTEE apple will not hit 200 in two months….so, i’ll be posting the question again….

WHAT WORK DID YOU DO TO CONCLUDE APPLE @ 200 IN TWO MONTHS??? WHAT PROOF DO YOU HAVE???
(the answer is none….so i don’t expect any feedback from you, imbicile)

ps…homework is NOT just watching stock prices and hearing apples forcasts….LMAO @ you because you think this is homework!!!

To maddawg, I did do my homework, you evidently don’t know how to read and your opinions are not based in fact.(must be an emotional investor type that thinks with his rear-end) Your not worth any more words.

I feel that the investors who dumped a wonderful stock like apple with 58% growth over and above anyones expectations could not please any blind investor also then I am sorry to say that the investors themselves are pushing the stock market down and giving the name recession. Apple is JUST 15 cents or 19 million shy of their forecast and yet its just a “forecast”, hello its not even happened and the investors gave such a bad beating to a beautiful stock like Apple. I guess if people start reacting in such violent ways , yes the stock market is going to see rock bottom. We ourselves dont want the stock market to go up and correct itself. Just a handful of people who got into sub-prime mortgages and bought 2 to 3 houses when credit was available for free have caused this mess and we have taken the whole market of USA down with it, dragging the wold economy with us. We just dug our own graves and many innocent people went down with this idiocracy

BIG LOLs to mike from cleveland.

you have the nerve to call people stupid because they are selling their over valued apple stock.

and in the next sentence you state you’ll be laughing at all those fools when the stock reaches over 200 in two months??

one question….how did you determine the stock to be worth over 200 in two months?

if you figure how to make conclusions like that, other than your blind hopefulness, which is the only thing you have in your investing strategy, you will truly know you’re an idiot for saying what you just said.

i’ll be laughing the next two months at your statement alone….hold on…i still can’t stop….ouch my stomach is hurting now…..

aren’t you the one that at the first part of january, said apple will be at $220 by mid month?? i think you are…LMAO!

oops, did i forget to mention to all you jim cramer bashers and analyst bashers….

jim cramer’s pinky nail has done more complete research on apple stock than your entire bodies put together….

that’s why he can state the facts he does……HE DOES HIS HOMEWORK!!!!

cmon ladies….

you ALL can’t be this retarded can you???

how many posts are here stating “apple stock shouldn’t drop becuase they have a really neato product!!!”

i hate to be the bearer of bad news….um….but ‘really neato products’ don’t determine the price of a companies stock.

why in the world would any of you continue to continue to continue to believe such nonsense???

do ANY OF YOU do any homework and determine the ‘actual’ value of apples stock??? or has the shiny packaging of their products still got you glazed over like a deer in the headlights??

you people that cry because apple stock is on it’s way to where it actually belongs are pathetic and you deserve to lose your money.

i’m laughing every single day at you ‘fools that soon part with your money.’

I’VE SAID IT A THOUSAND TIMES…..DO YOUR HOMEWORK SO YOU KNOW THE TRUE VALUE OF A COMPANIES STOCK!

you are not investors, you are reactors….don’t believe me??

how come you buy, buy, buy when the price is going up then??

better yet, how come you sell, sell, sell when the prices is going down??

this is not an investing strategy. it is a ‘fool soon parted with money strategy’.

apple is STILL over valued at $137…as soon as you actually do some work and determine the numbers for yourselves, you’ll be in a better position to make INFORMED decisions….not the typical imbicile reactionary decisions like i’ve seen most of you do for a year now…..

quite pathetic really, but you’re foolish tactics have been making me, and quite a few other real investors alot of money in the market overall.

you fools cannot be so….well foolish can you??

the reason apple went down, other than the fact that it’s been over valued for a year now, is not because of a single article. anyone that believes that is a bigger fool than they seem.

the reason is BECAUSE it is over valued and the bigger, smart investors know this……unlike most of you, they buy low sell high…..not buy, buy, buy just because a stock price seems to be rising then sell off in a panic.

most of you have not done your homework and i’ve been seeing posts proving it for a year now….just like some of the ones below.

again, glad i got out at $200, when i KNEW the price was WAY too high.

i’ll be buying around the 85-90s again, where it belongs….

remember, buy low sell high!!! it really is quite simple……IF YOU DO YOUR HOMEWORK FIRST!!!!

I see my first two posts were ever so graciously removed by the moderators. I’ll hope its because I used a name and not because they’re repressing my speech. The reason Apple tanked after closing last night was market manipulation. Pure and simple. No more than two minutes after Apple published their earnings, TheStreet.com published an article titled “Apple Soured.” A clear and succesful attempt to play on a sliver of information and make it seem catastrophic. At the same time hedge funds and other investors hammered the stock down, trying to sow panic and short the stock. This is clearly unlawful and a full investigation should be called into play.

ex ped: The moderators were sleeping, not deleting.

Yea, they used a combination of the media (writing the article mentioned by rick below), playing on fear in the market, and small sums of cash to manipulate the price driving it down after market close. You Jim Cramer describes how he does it by searching you tube for Jim Cramer. Its daylight robbery grace of his position as a media analyst, connections in the investment world, and targeted speculation.

And I quote “Piper Jaffray analyst Gene Munster “I talked to one of our technical analysts before the call and he told me that the stock was going down to 130 no matter what results Apple posted.”

Coordinated market manipulation, nothing less.

What a bunch of bull. Its pure manipulation by the hedge funds and large traders. Less than 2 minutes after results were posted, there was an article on TheStreet.com titled “Apple Soured.” Another one of the many manipulations by Jim Crammer and his cohorts to short the stock and profit on the back of the small traders. This is so blatantly wrong. When will the government investigate and stop this manipulation through the media.

Who is the clueless dude that did the video update from MacWorld? He has no clue what he is talking about. How often do you use your optical drive? It’s all wireless, dude- and remember that this is a 3rd style of notebook that Apple just added, not the only option. It’s for those that want to go wireless- they’re looking ahead. I’m not there, but they are…

I’m glad for the people who have made money off Apple, but I’ve never understood people’s love for them.

Neither the IPod nor the Iphone are top-quality items. Several other music players and phones do what they do and more for cheaper. Same with Apple computers – the cost of the computer is incredibly inflated over the cost of the parts and operating system.

The Macintosh OS is not immune to flaws or viruses, rather just the opposite – Apple has had the luxury of being the “invisible” guy because the majority of people were using Windows. As the population of Mac users grow, so will the problems that arise with them.

To the poster below who has never seen anyone leave Macintosh for Windows: I would gladly switch over, especially after SP 1 comes out for Vista. Then again, I’d rather use Linux than either of them.

James, since when is apple not greedy? Afaik, they are as greedy as any City, ML or BofA.

Armen, NY, do you work for Apple PR or IR?

Pat from Las Vegas said:

“For those who didn’t get the whole picture for the sell off of Apple. Without really saying so, they lowered guidance for the next qtr. and I expect them to come out somewhere in the middle of this next qtr. and lower it again.”

How exactly did Apple “lower guidance?” That would mean that they previously guided with a number and then came back and revised that number downwards. Obviously, that is now what happened. What DID happen was they provided initial guidance that Wall Street thought should be higher. Why Wall Street thought it should be higher is illustrative of how far removed many analysts are from reality. Just listen in to a conference call to witness how many dim bulbs are out there. How many times does Apple have to say that they don’t pre-announce upcoming products, and how many times do you hear analysts grill Apple’s financial guys about exactly that? I heard a question today and silently mouthed Apple’s answer, only to crack up a few seconds later as the familiar “I’m sorry, but we don’t talk about unannounced products” answer was given. If you make your investing decisions based upon analysts recommendations, good luck.

Outside Us Apple is mostly used by newspapers, graphics and in photo.
As You know Apple (and Mac) is not for the most users worldwide, and therefore not the big thing.
Japan and China stands for big news, mind them more!

Couple of other things:

1 – Apple NEVER gave guidance for Q2 08, tonight is the first time they gave a number. If ANALs can’t figure out the right number that doesn’t mean “Apple LOWERED guidance”, they didn’t lower ANYTHING.

2 – I am real tired of morons whining about the $100 price drop. I bought my iPhone at 599 and never regretted it for a second. The price drop meant less than a cup of regular sturbucks a day and I sure as hell enjoyed having my iPhone a great deal more than a cup of coffee during that time. FURTHERMORE, I took my $100 rebate and spent almost 7k at the apple store buying a macbook pro and and apple cinema among other things.

iPhone was my very first apple product and I am NEVER going back to using a PC.

So they beat the consensus and the stock plummeted. Maybe Apple should start playing the Enron shells game to keep Wall Street happy.

I guess the Piper ‘technical analyst’ doesn’t know which way is up because AAPL’s 200 day moving average is at 144.27 so who knows where he got his $130 from. If he is using the exponential average that’s even higher at 149.04.

I have been on the Apple roller coaster since the early 1990’s when I bought in at low double digit price per share. Back then I knew they made great products, just no marketing, it sucked, but waited for the days when people would wake up. Well come 2008, new products, tapping the video rental market, first time in cell phone market they dominate barely touching the world market and computer market share still in single digits but growing fast. On top of all that, a forecast of 29% growth in a weak economy is bad news??? One thing I have learned, bet against Apple and you lose. Yes the economy isn’t the best but where should you go in a weaken economy, the place to get as much bang for the buck as you can. Sorry but I don’t see any other company with the potential like Apple to hang on to until things get calmer. Maybe I think logic will rule the market one or two days every decade instead of short sighted emotion… guess not.

The answer to what happened and is happening to Apple Stock has nothing to do with it’s great earnings. It also applies to other great stocks that take a beating when the market corrects.
“When the whore house catches on fire, the pretty girls run out with the ugly ones.”

If Apple investors can’t appreciate the last quarter performance then they are going to have a lot of problems with most other stocks.

Apple had strong increases in sales, improvements on already great gross margins, $18+ Billion in cash and the best design teams in tech. They were also bright enough to be conservative on what’s heading our way in the Bush recession.

While there will certainly be challenges for a lot of companies in today’s economy Apple is very well placed to maintain a profitable position, because of their unique computers and other lines and some exception design that alone will generate demon.

Wow. Some really hot tempered, mean spirited comments here. I fail to see how hammering a guy who was unlucky enough to buy a product like the proverbial “kid in a candy store” advances the discussion in any way. Fortunately there have been several posts with what seem to be extremely well informed opinions. Even though several of them dissent. Which is one of the most amazing things about our society. Lots of smart people, free to make their own mistakes and have their own opinions. God Bless America! (and thanks for the excellent discourse for those of you who provided it…)

AAPL pays no dividend, so what it did in the last quarter is only an indication of how good or bad management is at forecasting and executing the busimess. The price of the stock is essentially some multiple of future earnings. So, earnings go down, lower number to multiply your multiple. Growth is lower than expected, multiple is lower. So, lower number times lower number means drop. Plain simple.
If you feel that AAPL will resume growth and keep beating expectations, especially future earnings expectations, this is a good time to buy. If you don’t think so, time to short. Good luck either way.

For those who didn’t get the whole picture for the sell off of Apple. Without really saying so, they lowered guidance for the next qtr. and I expect them to come out somewhere in the middle of this next qtr. and lower it again. This is part of worsening U.S. and global economic conditions. Though Apple’s stock may “pop upward” a time or two over the next couple weeks. Most agree it will probably head lower and test between $125-$130, and may even test lower. Apple will not see $165/$170 again until 3rd or 4th qtr. It will take a very positive economic event, more than lowering short term interest rates. Before Apple will ever see $200 again. There is just to broad a negative economic sentiment in the worlds markets. For any one company or sector to overcome. I hope you enjoyed the party gentlemen because for the moment it is over. The Dow is heading for the mid to low 11K, and may even test the upper 10K. Tech stocks are like the most fragile lifeforms of a larger eco-system, they always get killed first. I would wait for it to hit $125 (it will) then jump back in. Or for the annual shareholdes in Mar. where there is a good chance of getting in on a 2 or 3 for 1 split. Whch I think shareholders will demand.

RE: Iphone victim

Do you still have your iPhone. I bet you do. Please stop complaining because you bought your phone Day 1. You are lucky that Apple gave you the $100 rebate. Btw, even if they didn’t I know for a fact that A) you would still have your iPhone and B) you would still be buying Apple products because C) if you bought an iPhone, you are smart enough to know how great it is and how great and innovative Apple products are.

Like some others have said here, Apple is one of the FEW U.S. companies with no smoke and mirrors. Simple business model. How do they make money? By putting out great products that sell.

You can’t say that for many companies left in the U.S. and you still have a lot of market share that Apple will continue to grab (in the range of 50% or more..that’s a heck of a lot of revenue in the next 2-5 years).

I have heard HUNDREDS of stories of people migrating to Apples, from co-workers to family members to people in the stores. You know what I’ve NEVER HEARD??? Someone talking about going over to a new PC with Windows Vista or the Zune.

The stock is taking a hit because of the overall market and people with moronic views of housing market type gains.

The shoe fell folks, get ready to pay the piper if you invested or were a flipper in real estate and were one of millions that wanted a quick buck.

Guys, the author explained the price drop pretty clearly. AAPL had a huge amount of growth already priced into the stock, so the spectre of slower growth slices out that premium.

It’s not saying that AAPL is a bad company, just that these earnings indicate they are subject to recession just like everybody else. If you bought at 200, you just have to realize that your growth expectations were insane.

As an international investor I was shocked to see that Apple shares were down in aftermarket trading. I guess nobody let the “aftermarket traders” know that Apple is getting ready to release the iPhone in China? With over 500 million mobile subscribers, I bet this will INCREASE Apple’s value, not decrease it.

I know all you guys are mac heads and are probably not hard core inverters but you should look at stocks like Cisco, Intel, even god forbid M$ and what happens when stocks can no longer meet inflated expectations. You should be prepared for the fact that the stock may never reach these high prices again. I’m not saying it won’t but as an experienced inverter i’m just saying people should use cation when thinking about buying Apple here. If you think Apple will come back buy an option contract for Apple at $140 in a month or two but don’t be crazy and buy here if you don’t have money to risk.

It ’s clear that AAPL is still learning how to live up to the prodigious expectations it has created amongst its customers and shareholders.

The iPhone price drop affair was handled in an amateurish fashion. I challenge anyone to demonstrate a similar price drop for a premium positioned device within a 3 month timeframe from its initial launch…
The short answer is a 33% price reduction is only to be found 8 -12 months into a product cycle, and even then it is usually done in an unspectacular fashion so as not to irritate “early adopters”.

ALL THEY HAD TO DO WAS MEET OR EXCEED GUIDANCE BUT THEY CHOSE TO PLAY THEIR STUPIS SANDBAGGING GAMES AND GOT HIT FOR IT! PETER SHOULD GO TO RIMM SCHOOL TO UNDERSTAND HOW ITS DONE!

I don’t remember Apple dragging people out of their house to stand in line for an iPhone.

Prices always drop. Early adopters pay the most and have more glitches, that’s the price you pay for being first.

I love watching ignorant investors panic, sell you idiots sell. If your too stupid to see the potential of Apple for ‘08, then go take your money somewhere else (and I hope you lose your shirt), we don’t your head in the rear-end thinking on the Apple freight train. I’ll be laughing at you fools when Apple is back over $200/share in the next two months.

Hey fine! I’ll just buy some more Apple stock at a lower price! It will go up and split eventually.

And for the iPhone “victim,” well you’re just retarded. You wanted some pretty bling to show off how cool you were and you got it. Awwwww you paid a lot and then it dropped $100 in price. And yet still no girl wanted to go to the prom with you…. Boo hoo. Grow up. Apple makes some of the best tech goods available and set the trend. Can a person EVER look at a new cell phone now and not compare it to the iPhone. Apple has made every other phone out there look clunky and primitive. They changed the paradigm, as they had with the iPod. I own a Zune. Sadly, it ain’t no iPod.

Yeah, you were exploited. The nerve of them lowering the price! My brother bought a PS3 just 6 weeks before the price fell $100. Does he have a right to be upset? No, not really. That’s business. Now, would you like to know what he did with the $50 Sony sent him? So would I. All these months later, he’s STILL waiting for the check! I’m starting to believe it’s not coming!

You are a “victim” because you chose to purchase an iphone????

Ever hear of the phrase “A fool and his money is easily parted”???

Should have waited like the rest of us.

Iphone victim here, serves Apple Corp. right for exploiting early iphone users. First & last time I will ever purchase any Apple products. Their secretive tactics annoy both customers and investors.

iPod was only flat in U.S. They actually grew that number too. Japan gobbled them up according to them.

Yes, and that last comment from the PJ analyst showed you in a nutshell exactly what is wrong with the market. APPL beat the Q1 revenue #s by about $130m, the conservative forecast for Q2 is about $180M low. That’s a total of $50M in revenue below forecast for the combined two Qs, when annual revs are >$30B. And the stock sells off ~$15B in market cap after hours and the S&P futures plummet. In the words of Johnny McCain, THAT my friends, is what is wrong with this picture.

This is what the market and people have come to huh?

We have a great company like Apple with a great product that BEATS expectations, posts a PROFIT and the stock goes DOWN because they didn’t post some absurd mind blowing figure? Are you kidding me?

Take a look around. This is a model of good business.

This isn’t CITI or ML or BoA or any of those other companies who’s stock has plummeted because of unwise decisions based on greed.

This is really a disturbing trend in my opinion. If a solid company gets hammered because of profit, I can’t wait to see what happens to companies that are seriously struggling.