Why Apple Shares Got Hammered

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Apple (NASDAQ: AAPL  ) have gotten hammered today, down by as much as 12% after the company reported worse-than-expected earnings driven by light iPhone sales.

So what: The company reported record results in revenue of $54.5 billion and net income of $13.1 billion, or $13.81 per share. iPhone units were less than analysts were expecting, amounting to 47.8 million, although iPad units were in line with forecasts at 22.9 million.

Now what: Investors are also concerned about the company's guidance, which calls for revenue in the current quarter of $41 billion to $43 billion, while the Street was expecting $45 billion. CFO Peter Oppenheimer's comments were interpreted as meaning Apple would be more realistic with its guidance, a shift from its previously conservative outlooks. Mac units were also weak due to significant supply constraints on the new iMacs.

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  • Report this Comment On January 24, 2013, at 7:18 PM, 2sour wrote:

    This is a perfect example of what's wrong with the stock market and why so many don't trust it and refuse to invest in it. Apple has a balance sheet that any company would die for and it kicked ass last quarter, but got hammered.

    AMD, on the other hand, (just one of many examples) actually IS in deep trouble with dwindling future prospects and LOST money (again), but got a 10% boost with their earnings report ...

    I'm not an AAPL fanboy, or a financial expert, but I know it drives people crazy and contributes to the belief that the market has nothing to do with the "fundamentals" and the so-called "Analysts" are just playing games.

  • Report this Comment On January 25, 2013, at 12:55 PM, FurtherNorth wrote:

    When Apple disolves as a company next week, will I still be able to use my iPhone?

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