Will Apple's (AAPL) - Get Report profits go lame in the current quarter, just like the company says they will? Well, anything can happen. But as we saw in Apple's fourth quarter, reported after yesterday's close, and in countless previous quarters, it has turned the act of talking down Wall Street expectations into a high form of performance art.
In the lead-up to yesterday's earnings announcement,
published an article featuring Apple's guidance ($1.00), Wall Street consensus ($1.11) and the whispered consensus of a grab-bag of Apple experts ($1.25).
Apple, as usual, beat them all, with $1.26. But once again, and this is crucial, it lay its own guidance to waste. Remember? It was only one buck. That's not a beat -- it's a beating.
So when Apple went ahead and talked down the
quarter's numbers, did the business media realize what the company might be up to and allow for the possibility of expectations game-playing?
Some media outlets did let you, the savvy investor, know up front what might be going on. Some buried the possibility way down in the article; maybe you'll find it, maybe you won't. And others did not mention it at all.
The standard-bearers (the only ones you should even pay attention to) included
, which in the
made the situation more than clear: "Although earnings topped Wall Street analysts' estimates, Apple kept with its tradition and delivered a first-quarter outlook that fell below analysts' forecasts, potentially setting the company's stock up for a big decline on Wednesday."
Got that? Ratcheting down numbers in the coming quarter is tradition.
let you know right from the start that you should take Apple's guidance with a grain of salt.
even got the issue into a headline: "
Got that? It's a safety dance. Later,
spells it out: "Apple, which is famously cautious in its outlook, issued forecasts for the important December quarter that were below Wall Street estimates, but investors and analysts said it was probably another example of Apple lowering expectations only to exceed them later on."
Other business media efforts fell short.
The New York Times
, for example, mentioned in its
simply that Apple lowered expectations: "Riding a wave of consumer enthusiasm for its hand-held iPhone smartphones, Apple reported strong fiscal fourth-quarter profits that outpaced Wall Street's expectations. But it warned of slower sales ahead."
Unfortunately, you have to read halfway through the article to find the phrases "Apple is traditionally conservative" and "Apple always makes conservative forecasts," which should have come right after word of the warning up top.
At least the
eventually ambled along and mentioned the tradition of conservative forecasts. In an article called "
Apple Beats Forecast but Gives Weak Outlook
totally failed. It mentioned guidance "well below expectations" in the lead, but dust the entire article for fingerprints and you won't find word one about Apple's ongoing expectations game with Wall Street.
Is Apple the company that cried wolf? Could it really, in this economy, be headed for tough times? It certainly has a lot going for it, but it might get hit along the margins with lower-priced laptops and the like.
Alix Steel remarked right away in
to savvy investors, Apple usually sandbags, but these number do seem a bit leaner than usual.
Maybe this time is more than just a game, but don't let the business media get away with not providing you, the savvy investor, with the necessary information: Apple has played this game before.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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