Sigh.
The pump and dumpers are all over this again in the after hours of the market as they scream that it’s the greatest company of all time and everyone should have some of their technology installed into their brains so we could all think alike.
Or something.
The headlines are the same old same old:
Apple Q2 earnings beat expectations on better than anticipated iPhone sales
Apple earnings show surprise jump in iPhone sales and a 4% dividend hike
Apple Beats Sales Estimates in Sign iPhone Is Weathering Slump
Apple reports better-than-expected quarter driven by iPhone sales
It’s the same everywhere one clicks.
The after hours stock performance brings Apple’s shares back to where it was trading all the way back to last night.
My online Twitter cohort Frog Capital however pointed out quite accurately on Twitter that this report wasn’t as it seems:
This is $AAPL's earnings statement.
— Frog Capital (@FrogNews) May 4, 2023
I highlighted every category that was worse than the same quarter last year. (nominal)
It would have been easier to highlight the parts where they did better.. pic.twitter.com/YcJtcV0GyT
But, but, but, the analysts on CNBS said, blah, blah, blah. Before the report here was the headline:
Apple Reports Earnings Today; Revenues Could Decline in Q2
Screen shot for posterity:
Thus why do I bring this up today?
The report is not that great, there is obviously anticipation of a recession in the West creating revenue issues for the company, and sales are stalling in many areas.
The weird part? They beat earnings estimates. The very same earnings estimates they give Wall Street analysts every quarter then reduce so they can say that Apple beat with an earnings surprise and convince the sheeple that they never lose.
Need some proof?
Here is the story from Q2 2008 from Fortune magazine:
Apple’s Q2 earnings: What to watch
BY Philip Elmer-DeWitt
April 21, 2008 at 7:00 AM EDT
Excerpt:
Recession fears were a big factor in what turned out to be a three-month bungee jump, but what really spooked the market was Apple’s Q2 earnings guidance: 94 cents per share, nearly 15% below the Street’s average estimate of $1.09.
The street does not give the estimates, Apple does. So when they reduce estimates, they can produce headlines like these from their own website on April 23, 2008:
Apple Reports Record Second Quarter Result
Excerpt:
CUPERTINO, California—April 23, 2008—Apple® today announced financial results for its fiscal 2008 second quarter ended March 29, 2008. The Company posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.
See how easy this game is?
I’m not singling out Apple but they are the big banana which should produce a mild market bounce tomorrow. In 2008, during the conflagration known as the Depression of 2008 (that’s for historians like me to label, not Wall Street media types), Apple was doing well until the financial crisis finally caught up to them.
It’s the same today during the precursor to the largest crash in modern market history as it was then.
For almost every company that announces an “earnings surprise”everyone should remember this fact.
Wash, rinse, repeat.
Suckers.
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