Apple Inc. (AAPL) shares open at $401.35 per share versus Tuesday’s close of $422.24 post-Q4 2011 earnings.
What’s the problem? Shares are down more than 5% at this moment just past 10 A.M., Eastern.
Apple posted better 4Q 2011 results to wrap up fiscal year 2011 than they had in 2010. Here are the numbers: quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 EPS. Compared to 4Q of 2011 which investors observe the company post EPS of $4.64 and $20.34 billion dollars of quarterly revenue, shares dropped anyway this morning. Annual revenue for the fiscal year exceeded 100 billion dollars to $108B.
Q4 2010 versus Q4 2011 shareholders enjoyed a EPS improvement of $2.41 dollars and a revenue jump of nearly 8 billion dollars ($7.93B). I know of a company or two which would not mind an extra 8 billion dollars – actually, that is nearly a third of the cost to complete the fence along the Texas & Mexican border which is over 1,000 miles long according to yesterday’s Republican Presidential Debate. But, this is about AAPL, not politics.
There are various other news articles by other outlets which note references by people suggesting that Apple missed street expectations. That is not entirely accurate as the most optimistic analyst EPS estimate we found was $8.22 EPS with the most pessimistic being $6.10 and the average being $7.28. Sure, AAPL missed the average mark but just by 23 cents when EPS is almost 3/4 of the way to an even, double-digit, 10 dollars. While 4Q did not match the 3Q 2011 EPS figure of $7.79, it’s not exactly fair to suggest net profit is going in the gutter.
Speaking of double-digit EPS, Peter Oppenheimer (Apple’s CFO), said, “Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion and we expect diluted earnings per share of about $9.30,” which would be on-track for potentially reaching the 10 dollar mark relatively soon.
“Poor iPhone sales,” you may have read. Again, that is not entirely accurate as the launch week of the iPhone 4S sold more iPhone’s than ever before in the history of Apple. Poor may be found in not having sold as many as desired, but poor at its base point, particularly during the setting of a new company milestone, it is not. Actually, iPhone handset and accessory sales reached 24% of an improvement over 4Q 2010.
While AAPL broke to the south this morning, doom and general gloom may very well be premature.