It's a weird Wednesday as we anticipate earnings news from Apple after the close later today. Weird because we got this hint into Apple's numbers from AT&T yesterday when the company disclosed 146,000 iPhone subs that first weekend the phone went on sale.We'll get a far better picture today from Appleas far as iPhonesales are concerned; but AT&T's news didn't stop Apple shares from suffering their worst, one-day point decline in seven years. The number should be bigger from Apple. Some of the AT&T phones weren't activated in time to count towards the quarter. But those sales WILL count toward Apple's quarter. So, just how big a numbers problem did AT&T have in activating new customers? Thousands? Tens of thousands?
The question now is: should yesterday's plunge be a buying opportunity for Apple? Some investors seem to think so, erasing a nice chunk of yesterday's plunge. And Pacific Crest's Andy Hargreaves seems to think so, saying: "You haven't had many opportunities to buy this stocks on dips over the last couple of years, so any time it dips, it tends to be a pretty good opportunity." He calls the AT&T news surprising, but certainly not enough to change his longer term outlook on the company.
Gene Munster, the Apple bull at Piper Jaffray is sticking by his longer term outlook as well, saying iPhone "This could take a 20% revenue growth business and move it to 40% revenue growth in the next couple of years. This is absolutely game-changing."
Apple sold an average 4,000 iPhones an hour during that 30-hour period, and yet for some reason, extraordinary expectations on the Street, trumped what would otherwise be an extraordinary success by any conventional measure. That's too bad. But Apple's partly to blame as well. The company never dampened those expectations, never tried to gear the Street or industry pundits back to some sense of reality. The company was caught up in its own hype the way so many others were.
Not to worry. We'll get better clarity from the company this evening. And there will be a fair amount of focus on Apple's guidance. The company historically sandbags the Street with a conservative outlook so it can "beat" expectations later. But listen to the conference call today. Listen for news on margins; on outlook; what the company says about its Mac business, and what, if anything, it has to say about iPhone sales from here forward. Apple's fiscal 4th quarter is already anticipating some sizeable increases in EPS and revenue. But the Street will be looking for more.
Apple regularly delivers the goods. Today's numbers should be interesting.
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