M.G.Siegler is absolutely right on this one. Afraid of being called timid, analysist are now forecasting silly figures for Apple. So when Apple beats its own forecasts by “only” £3.3bn, shares fall.
Earlier this week I mentioned Horace Dediu’s overestimate of Apple’s results in the last quarter of the fiscal year. Horace is one of the more responsible and, usually, more accurate Apple commentators because he really does his homework. He has explained his reasoning cogently.
But some other analysts are terrified of being caught out underestimating Apple’s figures and indulge in a sort of “mine-is-bigger-than-yours” contest in the hope that one of them will come up with the right figure. They know that Apple is normally very conservative and has never, in recent history, fallen short of estimates. This last quarter is no exception. They forecast revenues of $25bn but returned $28.3bn. Not bad by any standards, except by those of the analysts who were pumping up into the thirties.
As Siegler points out, conservative Apple is forecasting an all-time record revenue of $37bn for the current quarter and it would be no surprise to see that figure edge nearer to $40bn. The analyists, perhaps chastened by last quarter’s debacle, will be more restrained this time.
Disclosure: Unlike M.G.Siegler, who holds no Apple stock, I do own stock in the company.