So get this: Apple has beaten Wall Street estimates for earnings 14 quarters in a row. That’s over 3 years, which is insane. How did analysts manage to pull this “why do you keep hitting yourself?” routine for so long? Aside from hilariously underestimating the popularity of Apple’s offerings, they also pretty much ignored Apple’s product cycles, most notably for the iPhone and iPad. Question for all you high-paid Street analysts: what is going to happen to iPhone sales the last quarter before the introduction of a new model?
I’ll give you guys a minute…
They’re going to go down relative to the prior quarter, especially when that quarter is enjoying a bump from the introduction of a new carrier. Makes sense, right?
So why the freak-out when Apple missed the Street’s estimates of $7.22 per share (by $.17) and revenue of $29.5 billion (by $1.25 billion)? Because analysts picked this quarter to froth their loins over Apple with absolutely no good reason. After the catastrophic passing of Apple’s CEO (the Street’s sentiment up until the day it happened) and mere days before the release of the newest version of their flagship device, this is the quarter they choose to ignore Apple’s guidance and blow out their estimates?