Apple reported bad earnings. The company missed estimates on almost all metrics as shown below.
- Earnings came in at $8.67 vs. published consensus of $8.75 and whisper numbers around $9.10.
- iPad sales came at 14 million vs. published consensus of 17 million and whisper numbers around 18 million.
- Mac sales came at 4.9 million vs. estimates of 5 million.
- Gross margins came in at 40% vs. estimates of 40.6%.
- Apple guides for first-quarter EPS of $11.75 vs. consensus of $15.53.
- Apple guides revenues for Q1 of $52 billion vs. consensus of $55 billion.
On the positive side, the company sold 26.9 million iPhones vs. published consensus of 25 million and whisper numbers of about 27 million.
Prior to the earnings release, supply problems for iPhone were well telegraphed. On the conference call, Tim Cook stayed confident about these issues, saying , “We are in a significant state of backlog. I am pleased with the current amount of output. It’s difficult to predict when supply and demand will balance.”
Mr. Cook stays optimistic about tablets. “We continue to be very confident that the tablet market will surpass the PC market… There is an incredible development in ecosystem and product development in the tablet space. It is already extremely compelling for customers to choose an iPad over a PC. Each quarter you see 80 to 90 million PCs being sold… we do think the iPad, iPad mini and iPad 2 will all be extremely attractive offerings for people in lieu of PCs. We are very, very confident in what we have in the pipeline. We are extremely pleased to have launched iPad Mini and can’t wait till next Friday when we begin selling the first unit.”
From a long-term perspective, the Apple AAPL story remains intact, but for the near term, risks to the stock have increased…Read more at MarketWatch
