"Implausible or not Apple always beats estimates; and always isn’t really an exaggeration here. Topping estimates for this quarter would amount to 30 consecutive better-than-expected reports, a trend Roger Kay of Endpoint Technologies tells me isn’t likely to change.
“Apple typically gives very low-ball guidance, then the pro analysts on Wall Street try to figure out how much higher it’s really going to be,” Kay says, laying out Apple’s reporting magic. “Then the amateurs come in and raise them a little bit, kind of like a poker game,” he explains. “Finally (Apple) really reports numbers and it’s beyond even that."
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This is why extrapolating past trends is dangerous. Analysts who follow Apple were expecting earnings of $7.38/share vs. the $7.05/share they posted. The unit sales on virtually every product line were below expectations. The stock is down in after-hours trading even though operating income grew +50% year over year.
The analysts are all scrambling to refine their models, but I think it misses the key point; is there something else out there that is taking money away from Apple in their core products (iPhones, iPads, iPods) or is the consumer just holding off on upgrading their gadgets while they wait and see which way the economy is going to go?
