updated 05:50 pm EST, Tue January 22, 2008
Apple shares plummet
Apple's shares plummeted in after-hours trading today, nearly $19 per share or just over 12 percent to stand at $136.82 as of 5:35PM ET. Shares had already lost about 3.5 percent during normal trading hours on volume of about 85 million. That means Apple's shares are off more than 30 percent from their 52-week high of $202 reached in late December, 2007. Propelling the earnings decline was Apple's earning forecast. For its second quarter, Apple expects earnings of about 94 cents per share on about $6.8 billion in revenue. Analysts expected earnings of $1.09 per share on revenue of $6.98 billion. This despite the fact that Apple is predicting a 29 percent increase in revenue year-over-year, while last march revenue grew only 21 percent.
Earlier in the day, Apple posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share for its fiscal 2008 first quarter ended December 29, 2007. The Company said that the results compare to revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share, in the year-ago quarter. Analysts surveyed by Thomson Financial had forecast Apple to earn $1.62 a share on revenue of $9.47 billion.
Steve Hach, a senior analyst at forecaster ValuEngine, is one of the few pundits who accurately predicted the current state of Apple's stock price. In early Dcember, he said "In a perfect world, our computer model would set Apple's stock at about $135. "Apple is far more overvalued than Google, Intel, or Microsoft."
Other analysts were extremely bullish on the stock. Piper Jaffray senior analyst in late November said "We are adding Apple to the Alpha list, expecting material upside in the next 90 days," Piper Jaffray's Alpha List serves as a spotlight on the potentially fast-growing stock prices of companies which are likely to experience major gains in the near term, usually as a result of catalyst events. The analyst reiterated his "Buy" rating on Apple shares with a price target of $250.