Apple Guides Lower for Q2 2012, but with Reasons

| Apple Stock Watch

Apple offers lower guidance than expected for Q2 2012Apple is offering lower guidance than expected for its second fiscal quarter of 2012, which raised questions from analysts during the company’s first fiscal quarter earnings report on Tuesday. CFO Peter Oppenheimer, however, was ready and offered up a list of reasons why Apple’s second quarter guidance isn’t as aggressive as anticipated.

Mr. Oppenheimer said Apple is expecting revenue for its second fiscal quarter to hit US$32.5 billion, which is still up substantially from the $24.7 billion the company brought in during the same quarter last year. Gross margins are expected to be about 42 percent, and operating expenses are projected at $3.05 billion.

Mr. Oppenheimer’s reasons for the second quarter guidance figures:

  • The December quarter, or first fiscal quarter of 2012, included a 14th week this year between Christmas and the new year. Quarters usually include only 13 weeks.
  • The previous 14 week quarter landed in March last year, which Mr. Oppenheimer said was a “big quarter.”
  • iPhone channel inventory jumped up by 1.7 million units during the March quarter last year, giving the quarter a nice boost Apple won’t likely have this year.
  • The recent iPhone 4S launch gave the December quarter a nice boost, and pent up demand from consumers waiting for the new iPhone model to launch has been addressed.
  • The U.S. dollar is stronger compared to the Euro than it has been, and that will have an impact on sequential comparisons.

Apple reported record breaking numbers yet again during its fist fiscal quarter earnings conference call. The company reported US$46.33 billion in revenue, and profits at $13.06 billion, or $13.87 per diluted share.

Mac sales climbed 26 percent compared to the same quarter last year to 5.2 million units, continuing the company’s upward trend in PC sales while the rest of the market is in decline. iPhone sales shot up 128 percent with 37.04 million units sold, and iPad sales hit 15.43 million units, up 111 percent.

The company has $97.6 billion in cash, but isn’t saying what plans it has for the money. “We’re not letting it burn a hole in our pockets,” Mr. Oppenheimer said.

Apple is currently trading after hours at $453.90, up 33.49 (7.79%).

Comments

wab95

Well that tears it.

This lower than expected guidance outweighs performance in sales and revenues that exceeded expectations.

This must mean that Apple execs know that Google and MS/Nokia are going to pummel them to single-digit market share in both smart phones and tablets, and that Dell will rise again and steal PC market share in the laptop space, or maybe that the company is just out of ideas. Whatever it is, they know something, otherwise they’d have guided more aggressively.

Time to sell those shares.

ck134

This must mean that Apple execs know that Google and MS/Nokia are going to pummel them to single-digit market share in both smart phones and tablets, and that Dell will rise again and steal PC market share in the laptop space, or maybe that the company is just out of ideas. Whatever it is, they know something, otherwise they?d have guided more aggressively.

Time to sell those shares.

Hilarious!  Because they only anticipate making 8 billion dollars more in the next quarter than the same year-ago quarter you think Apple is in trouble?  That totally makes sense.  Thank you for the advice to “sell those shares.”

ck134

I apologize, wab95 - I just re-read your comment.  I now realize you were being sarcastic?  My bad.

DamenS

LOL - how could you miss that ?  The sad thing though is that whilst it is intended as a joke, the way the sharemarket views AAPL it is only a partial joke - after this brief (and too small given the level of outperformance) price spike, look for questions about “sustainability” and the lack of innovation without Jobs at the helm to go hand in hand with the typical stupid share price drop ...

wab95

I apologize, wab95 - I just re-read your comment.? I now realize you were being sarcastic?

No worries, mate.

DamenS is right, pundits are already talking about sustainability, even suggesting that this cannot go on and that Apple will soon run out of ammo and be overwhelmed.

This is an evidence-free prognosis.

DamenS

Its unfortunate, but one thing AAPL (my first ever share market experience) has taught me (in conjunction with the GFC, Job’s health scares and 3 years of reading analysts) is that no matter how confident I am about Apple, “no man is an island” (every company must defer to an overall trend eventually) and “perception rules over reality”. 

It truly is sad, but it is also the way things are.  I almost lost all my money when Apple dipped down to $80 (from just over $200 I think in 2008 - I shouldn’t have bought on Margin, but it worked great for a while), and I was amazed at the stupidity of people who would let the stock fall that far - they were wrong to do so ... BUT, if I had have been wiped out completely, NO amount of “being right” and “I told you so” would have helped during Apple’s rebound :(

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