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A guidance from Apple of $1.00 really means that they will come in around $1.30 to $1.45

uPOD.

Under Promise, Over Deliver

History is repeating itself. Last year, right after the iPhone was announced and fantastic earnings were announced, the stock crashed. Why? people panicked when Apple gave "low" guidance. Then at the second quarter, they figured it out and ignored the guidance. This year, they seem to have forgotten what they learned last year.

Apr 24, 08 - 03:18 pm Comment from: DogGone

@ Investor

It's also about future products. The market is assuming Apple will do well. They want something new like the iPhone 2.0 to drive up the price again.

Finding fault with the guidance is just an excuse to drive the price down after cashing in on profits.

I'm very long on Apple since I've given up trying to predict Aapl stock price.

Gee, Apple being conservative. Whats the world coming to. Could you imagine what would happen if they went balls out and said in the next quarter we will earn $4-$5 per share instead of $1.........

They would get drawn, quartered, and hung out to dry. The stock would plummet to $75, and all the winblows apologists and analists would be bragging about how they KNEW that Apple was just a fad.

With rising gas prices and the country in an economic downturn what did they really expect Apple to do? As the for the headline, mothing new = nothing news.

If you forgot what you learned, did you ever really learn it?

Actually, since Apple's revenue number of $7.2B is INLINE with estimates, it's their gross margin, which is slightly lower than analyst estimates that is driving the eps difference. If the analysts adjust their eps based upon GM, then they'd be inline as well. In other words, Apple's conservative guidance is completely inline with analyst estimates.

KenC mentioned that Apple is inline with the anal-istas..... None of which sit on the Apple Board of Directors, or know anything about what Apple has coming.

Why is it so all fired important that Apple be in line with the analistas which have no clue? Why isn't it that the analistas need to be in line with Apple, who knows what is going on?

Yeah, the age old question, why do analistas and the street get to screw up and be so wrong without any fear of loss or punishment, but if Apple misses someone elses projections by a percent, or even exceeds them, just not exceeding them by a great enough margin or percent and they are penalized with 30% off their stock price?

MW = except......

REMEMBER, that Apple will NOT recognize any new iPhone revenue from March till the new v2 of the OS is out of the door in June.
That has an impact on guiding and earnings!

This is all because of accounting regulations.

Apr 24, 08 - 08:20 pm Comment from: Steveeee

From product to guidance, Apple always "under promise, over deliver". Don't like this practice? You can always embrace the "Over promise, under deliver" M$

When considering next quarter's guidance, don't forget that Apple's unusual (but appropriate) revenue accounting for iPhone (and AppleTV). Revenues for each sale are spread out over eight quarters. Q2 08 was the third complete quarter since iPhone was released in June 2007.

In Q4 07 (the first quarter after release), Apple only recognized 13% (1/8) of iPhone revenue.

In Q1 08, it recognized 13% of deferred Q4 07 sales, plus 13% of Q1 08 revenues.

In Q2 08, it recognized 13% of deferred Q4 07 sales, plus 13% of deferred Q1 08 sales, plus 13% of Q2 08 revenues.

The beauty is that due to the confluence of rapidly increasing iPhone sales and the revenue accounting method, the numbers for the first eight quarters will be growing amazingly fast.