updated 01:30 am EDT, Tue April 2, 2013
Guidance was $41 to $43 billion; below consensus guesses
Apple will hold its quarterly conference call and announce its fiscal second-quarter earnings after the markets close on April 23. As usual, the call will be streamed live on Apple's website beginning at 2PM Pacific time. The company previous advised (as part of a "new, more accurate" approach that has befuddled analysts) that it expected revenues of between $41 and $43 billion -- down from the consensus forecast of $45.6 billon. The figure represent a normal drop in business following the holiday quarter, where Apple shattered company records but came in just under Wall Street's expectations.
Apple's more full-throated embrace of Wall Street investors and analysts is a double-edged sword, as the company and shareholders have discovered. Institutional and professional stockholders, generally disdained and largely ignored by CEO Steve Jobs during his tenure, have ironically been much more hostile to current CEO Tim Cook -- even as Cook has lead the company to being one of the most valuable on Earth. Even with the fall of the stock following its all-time high, it still closed 2012 up almost 30 percent on the year. Cook has also returned yet more cash to shareholders in the form of dividends -- a perk Jobs never offered from his return to Apple in 1996 to his death -- but nothing seems to reassure investors.
AAPL dropped again on Monday, closing down nearly $14 for no discernible reason. The company has recently seen a string of good news, but investors appear to prefer the high-risk stakes of Amazon or the reliable-but-costly slow growth of Google -- impatiently awaiting Apple's next industry-shaping innovation so that "fast followers" can get on with copying it. Should Apple miss the unrealistic expectations, the stock is likely to take another pummelling.
In January, Apple announced one of the most successful quarters of any company in history, posting revenue of $54.5 billion and earnings of $13.1 billion, however this was slightly below Wall Street's estimate and the stock has struggled to maintain an even keel. It had earlier in the year gotten beaten down from the high $600s to near its present $430 range by a string of clearly-manipulative stories, none of which turned out to be accurate.
In the March quarter just ended, the company kept a reasonably low profile, adding a 128GB version of the iPad, bringing cellular iPads and the iPhone 5 to China, and dropping prices on its portable lines. While the company has made it clear it is working on a number of new projects and has its annual revisions of the iPhone and iPad yet to come, the uncertainty and lack of advance notice now has pundits nervous rather than anticipatory.
Apple has a number of options in front of it to help improve the performance of the stock, since simply selling more units than nearly anyone else and making more money than anyone else doesn't appear to impress Wall Street anymore. One possibility is an increase in the payout of dividends, which would both make the stock more attractive to investors (in theory -- the introduction of dividends has not had any positive effect so far) and help reduce Apple's massive cash hoard, which continues to grow faster than Apple can currently disperse it (due to those sales figures that analysts no longer seem to value).
Another option would be to announce a larger share-buyback program, or the issuing of preferred stock -- both of which would theoretically make the existing stock more valuable. And of course, if Apple could pull off a surprise new product announcement in the near future that would again show the company has doing more than refining its existing product lines, that also might reassure investors that Apple will survive the loss of its visionary co-founder and former CEO.