So for the second time in a year, the Street’s analysts were sad pandas because they couldn’t predict APPL’s earnings for its 3Q 2012. The engine driving Cupertino’s rocket ship – the iPhone – was the main culprit, due mostly to the fact that analysts don’t consult a calendar when making their predictions. Sales led by the 8 month-old iPhone 4S fell about 3 million units short of Street consensus estimates. Apple’s own guidance, which analysts are starting to ignore more frequently, was beat on every metric.
It’s bad enough that the institutional analysts are essentially throwing darts at a board when it comes to AAPL predictions; it’s even worse when the reporting after the fact gets it wrong.
“AAPL sags as Apple buyers go with cheaper iPhones, iPads” claims The Associated Press. Here I was thinking that it’s because consumers didn’t buy enough iPhones, since Apple blew the doors off iPad sales to the tune of +80% YoY.
“The sheen is off the apple: It was a miss, no question about it,” said David Rolfe, chief investment officer at Wedgewood Partners Inc., no doubt grinning through the delivery of his super-clever pun. Rolfe must have spoken too quickly for the reporter correctly note that he said “our miss” instead of “a miss”. Rolfe does recover somewhat, saying “We became too confident in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe… and quite simply, that wasn’t the case this quarter.” I think he could have left off after “expectations” if he was really gunning for accuracy, since Apple’s pulse, as reflected in their guidance, was just about perfect. Maybe that’s why Rolfe works for Wedgewood Partners, and not some firm included on Philip Elmer-DeWitt’s list of institutional analysts.
In case you were wondering if the “cheaper iPhone/iPad phenomenon” was based on anything tangible, Apple CFO Peter Oppenheimer did say that “part of the reason was that consumers bought less expensive versions of the devices.” He also said a lot of other stuff, but you don’t differentate yourself as a news entity with headlines like “Analysts Ignore Apple Guidance, Feign Disappointment When Their Numbers Don’t Match.”
I’m hoping analysts get their shit together for Apple’s 4Q announcement, because iPhone sales, barring some huge carrier sign-on that no one sees coming, are going to be lower still in anticipation of the new iPhone (yes, it’s just iPhone this time, ZD “iPad HD” Net). But as the illustrious MG Siegler would say, once that happens, look out.