|Well, who'da' thunk? Apple's stock lost ground today following their excellent 3rd Quarter results announced yesterday. Apple traded as low as 51 5/16, a loss of 4 5/8, at one point, but managed a last minute rally to close at a loss of only 2 11/16, or 4.8%. Apple closed at 53 1/4. Volume was extraordinarily heavy with 15,103,300 shares trading hands.
Some analysts were concerned about lower than expected sales figures, as opposed to the better than expected earnings results, mainly tied to sales of the Blue & White G3. According to CBS Marketwatch:
Sales hit $1.56 billion, up from $1.4 billion a year before. However, that was about $40 million lower than most analysts expected.
In a conference call following the release, Apple Chief Financial Officer Fred Anderson backed the consensus earnings estimate for the current quarter of 76 cents per share.
However, he lowered his revenue guidance for the current period, which is the company's fiscal fourth quarter. The reason: Apple is gearing up for a big quarter at the end of 1999.
Apple shipped 487,000 IMacs in the just-completed quarter, in line with analysts' expectations. Shipments in the current quarter will be up "slightly" from that level, Anderson added.
But shipments of its PowerMac G3 came up under analysts expectations. About 338,000 units of the desktop computer shipped, below [financial analyst Richard] Gardner's projection of 365,000.
"The current stock price has already discounted a very solid (fiscal third) quarter," said Gardner, who raised his rating on Apple last month. Still, he sees shares heading higher -- into the mid-70s -- as new products and strategies kick in.
Apple's PC competitors once again showed mixed results. IBM, Gateway 2000, and Compaq all closed down while Dell and Hewlett-Packard closed up.
The Dow and the Nasdaq both closed in positive territory today. The Dow closed at 11186.41, a gain of 38.31, while the Nasdaq closed at 2839.37, up 21.24.
The Mac Observer Spin: This does seem to be a pattern. Apple announces a great quarter and promptly loses ground in the market. As the Apple Trader says, the market often buys on rumor and sells on fact.
The concerns about Apple's sales prospects are somewhat understandable, they did fall short on shipments of Blue & White G3s, even though overall unit growth was exceptional. Worries about Apple's sales are separate from the excitement about their earnings. The sales worries are long term and casting doubt about Apple's long term prospects. This despite Apple's phenomenal unit growth and confident pronouncements about their fiscal 1st quarter of 2000 (the Christmas season).
Locking in profits also may have played a role in today's losses as Apple was at another 6 year high with yesterday's close.
Lastly, look for the effect of options that expire tomorrow having an upward effect on Apple's stock. With lots of short contracts expiring, traders being forced to cover could offer somewhat of a boost to Apple's price.