AAPL: Pay Attention iConomy!

Let’s not even attempt to tear into the AAPL quarter. High quality print from the highest quality company.  The stock is > Keith’s $606 support line, which is very bullish if it holds. However, anyone that debates that this is a high expectation stock is smoking something. But let’s look at the double-helix that is Apple’s growth-setting expectations. The iConomy should be aware of this.

 

Let’s look at how expectations have changed over time. Specifically, we can YouTube the following factors…

a)      Expectations for a given quarter 4 months prior to the print (ie before guidance is given)

b)      Actual guidance given by the company for a given quarter.

c)      The haircut/upcut that the Street applied to such guidance (ie the Consensus numbers 4 weeks ahead of the print)

d)      Actual EPS

 

Before yesterday, there had been only one quarter (4QFY11) out of the past 10 when the company took down estimates >10%, and that was by 13.7%.  But when all was said and done, the Street came in 30% ahead of guidance. AAPL printed 1% below that.

 

With this print, the company took down expectations by 15.2%. That’s now 2 quarters out of 10 where expectations were taken down greater than 10%. Regardless, over the past 10 quarters, AAPL has exceeded its own guidance by an average of ~50% as well as expectations 1 month prior to the print by an average of ~30%. For AAPL to keep their expectation-beating trend in place, we’re going to need to see an EPS number next quarter just above $13.

 

 

<chart4>

 

AAPL: Pay Attention iConomy!  - AAPL SIGMA

 

AAPL: Pay Attention iConomy!  - AAPL TTT


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